Acquiring Information through Peers

By Bernard Herskovic and João Ramos

American Economic Review, July 2020

We develop an endogenous network formation model, in which agents form connections to acquire information. Our model features complementarity in actions as agents care not only about accuracy of their decision-making but also about the actions of other ag...

Relational Contracting, Negotiation, and External Enforcement

By Joel Watson, David A. Miller, and Trond E. Olsen

American Economic Review, July 2020

We study relational contracting and renegotiation in environments with external enforcement of long-term contractual arrangements. A long-term contract governs the stage games that the contracting parties will play in the future (depending on verifiable...

Incentivized Kidney Exchange

By Tayfun Sönmez, M. Utku Ünver, and M. Bumin Yenmez

American Economic Review, July 2020

Over the last 15 years, kidney exchange has become a mainstream paradigm to increase transplants. However, compatible pairs do not participate, and full benefits from exchange can be realized only if they do. We propose incentivizing compatible pairs to p...

Home Values and Firm Behavior

By Saleem Bahaj, Angus Foulis, and Gabor Pinter

American Economic Review, July 2020

The homes of firm owners are an important source of finance for ongoing businesses. We use UK microdata to show that a £1 increase in the value of the homes of a firm's directors increases the firm's investment by £0.03. This effect is concentrated amon...

Front Matter

American Economic Journal: Applied Economics, July 2020

From Efficient Markets Theory to Behavioral Finance

[Symposium: Financial Market Efficiency]

By Robert J. Shiller

Journal of Economic Perspectives, Winter 2003

The efficient markets theory reached the height of its dominance in academic circles around the 1970s. Faith in this theory was eroded by a succession of discoveries of anomalies, many in the 1980s, and of evidence of excess volatility of returns. Finance...

The Impact of Information Technology on the Diffusion of New Pharmaceuticals

By Kenneth J. Arrow, L. Kamran Bilir, and Alan Sorensen

American Economic Journal: Applied Economics, July 2020

Do information differences across US physicians contribute to treatment disparities? This paper uses a unique new dataset to evaluate how changes in physician access to a decision-relevant drug database affect prescribing decisions. Our results indicate d...

The Value of Reference Letters: Experimental Evidence from South Africa

By Martin Abel, Rulof Burger, and Patrizio Piraino

American Economic Journal: Applied Economics, July 2020

We show that reference letters from former employers alleviate information frictions in a low-skill labor market, improving applicant screening and gender equity. A resume audit study finds that using a reference letter in the application increases callba...

Multilateral Trade Bargaining: A First Look at the GATT Bargaining Records

By Kyle Bagwell, Robert W. Staiger, and Ali Yurukoglu

American Economic Journal: Applied Economics, July 2020

This paper empirically examines recently declassified tariff bargaining data from the GATT/WTO. Focusing on the Torquay Round (1950–1951), we document stylized facts about these interconnected high-stakes international negotiations that suggest a lack o...

Fenced Out: The Impact of Border Construction on US-Mexico Migration

By Benjamin Feigenberg

American Economic Journal: Applied Economics, July 2020

This paper estimates the impact of the US-Mexico border fence on US-Mexico migration by exploiting variation in the timing and location of US government investment in fence construction. Using Mexican survey data and data I collected on fence construction...

Front-Loading the Unemployment Benefit: An Empirical Assessment

By Attila Lindner and Balázs Reizer

American Economic Journal: Applied Economics, July 2020

We estimate the effect of front-loading unemployment benefit payments on nonemployment duration and reemployment wages. Exploiting a sharp change in the path of benefits for those who claimed unemployment benefits after November 1, 2005 in Hungary, we sho...

The Competitive Effects of Entry: Evidence from Supercenter Expansion

By Peter Arcidiacono, Paul B. Ellickson, Carl F. Mela, and John D. Singleton

American Economic Journal: Applied Economics, July 2020

Coupling weekly grocery transactions with the exact location and opening date of Walmarts over an 11-year period, we examine how Supercenter entry affects prices and revenues at incumbent supermarkets. We find that entry within 1 mile of an incumbent caus...

Prestige Matters: Wage Premium and Value Addition in Elite Colleges

By Sheetal Sekhri

American Economic Journal: Applied Economics, July 2020

This paper provides evidence that graduates of elite public institutions in India have an earnings advantage in the labor market even though attending these colleges has no discernible effect on academic outcomes. Admission to the elite public colleges is...

Gender Differences in the Choice of Major: The Importance of Female Role Models

By Catherine Porter and Danila Serra

American Economic Journal: Applied Economics, July 2020

We conducted a field experiment aimed at increasing the percentage of women majoring in economics. We exposed students enrolled in introductory classes to successful and charismatic women who majored in economics at the same university. The intervention s...

What Is the Added Value of Preschool for Poor Children? Long-Term and Intergenerational Impacts and Interactions with an Infant Health Intervention

By Maya Rossin-Slater and Miriam Wüst

American Economic Journal: Applied Economics, July 2020

We study the impact of preschool targeted at children from low-income families over the life cycle and across generations, and examine its interaction with an infant health intervention. Using Danish administrative data with variation in the timing of pro...

One in a Million: Field Experiments on Perceived Closeness of the Election and Voter Turnout

By Alan Gerber, Mitchell Hoffman, John Morgan, and Collin Raymond

American Economic Journal: Applied Economics, July 2020

During the 2010 gubernatorial elections, we elicit voter beliefs about the closeness of the election before and after showing different polls, which, depending on treatment, indicate a close or not-close race. Subjects update their beliefs in response to ...

Why is There so Little Money in U.S. Politics?

By Stephen Ansolabehere, John M. de Figueiredo, and James M. Snyder Jr

Journal of Economic Perspectives, Winter 2003

Durable Goods Theory for Real World Markets

By Michael Waldman

Journal of Economic Perspectives, Winter 2003

The early 1970s witnessed three major advances in durable-goods theory--Swan (1970, 1971) and Sieper and Swan (1973) on optimal durability, Coase (1972) on time inconsistency, and Akerlof (1970) on adverse selection. This paper surveys durable goods theor...

Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices

By Casey Ichniowski and Kathryn Shaw

Journal of Economic Perspectives, Winter 2003

Do human resource management (HRM) practices, such as incentive pay, teamwork, training, and careful screening practices, raise productivity, and if so, under what conditions does productivity rise? Recently, this question has been a central focus in orga...

Front Matter

American Economic Journal: Microeconomics, August 2020