Economic Puzzles: Noisy Prisoners, Manhattan Locations, and More

By Barry Nalebuff

Journal of Economic Perspectives, Summer 1987

Each "Puzzles" will begin with a few speed problems. These puzzles have answers provided in the same issue. Puzzles 1 and 2 will give you a chance to get up to speed. Then, we continue with longer puzzles taken from two very broadly defined categories: st...

Is Reputation Good or Bad? An Experiment

By Brit Grosskopf and Rajiv Sarin

American Economic Review, December 2010

We investigate the impact of reputation in a laboratory experiment. We do so by varying whether the past choices of a long-run player are observable by the short-run players. Our framework allows for reputation to have either a beneficial or a harmful ef...

Do We Underestimate the Benefits of Cultural Competition?

By Bryan Caplan and Tyler Cowen

American Economic Review, May 2004

Does It Pay to Know Prices in Health Care?

By Ethan M. J. Lieber

American Economic Journal: Economic Policy, February 2017

Consumers rarely know the price of medical care before they consume it. I use variation in the timing of access to a new source of price information to show how access to and search for price information leads consumers to pay significantly less for care....

Fiscal Volatility Shocks and Economic Activity

By Jesús Fernández-Villaverde, Pablo Guerrón-Quintana, Keith Kuester, and Juan Rubio-Ramírez

American Economic Review, November 2015

We study how unexpected changes in uncertainty about fiscal policy affect economic activity. First, we estimate tax and spending processes for the United States with time-varying volatility to uncover evidence of time-varying volatility. Second, we estima...

Leverage Cycles and the Anxious Economy

By Ana Fostel and John Geanakoplos

American Economic Review, September 2008

We provide a pricing theory for emerging asset classes, like emerging markets, that are not yet mature enough to be attractive to the general public. We show how leverage cycles can cause contagion, flight to collateral, and issuance rationing in a fre...

Horizontal Merger Policy: Problems and Changes

[Symposium: Horizontal Mergers and Antitrust]

By Richard Schmalensee

Journal of Economic Perspectives, Fall 1987

Most knowledgeable economists seem now to agree that the Department of Justice, the Federal Trade Commission, and the courts were excessively hostile to horizontal mergers in the 1960s. There also seems to be widespread agreement that the 1984 Merger Guid...

Capital Income Taxes with Heterogeneous Discount Rates

By Peter Diamond and Johannes Spinnewijn

American Economic Journal: Economic Policy, November 2011

With heterogeneity in both skills and discount factors, the Atkinson- Stiglitz theorem that savings should not be taxed does not hold. In a model with heterogeneity of preferences at each earnings level, introducing a savings tax on high earners or a sav...

Real Interest Rates and the Savings and Loan Crisis: The Moral Hazard Premium

By John B. Shoven, Scott B. Smart, and Joel Waldfogel

Journal of Economic Perspectives, Winter 1992

Real interest rates shifted upwards by four or five percentage points in approximately 1980. The question is why. In this paper we review some of the more popular explanations and point out that they are somewhat inconsistent with the facts. We then prese...

Is the 2007 US Sub-prime Financial Crisis So Different? An International Historical Comparison

By Carmen M. Reinhart and Kenneth S. Rogoff

American Economic Review, May 2008

Measurement Matters: Perspectives on Education Policy from an Economist and School Board Member

[Symposium: No Child Left Behind]

By Kevin Lang

Journal of Economic Perspectives, Summer 2010

One of the potential strengths of the No Child Left Behind (NCLB) Act enacted in 2002 is that the law requires the production of an enormous amount of data, particularly from tests, which, if used properly, might help us improve education. As an economist...

Report of the Editor: American Economic Journal: Economic Policy

By Matthew D. Shapiro

American Economic Review, May 2016

Disease and Gender Gaps in Human Capital Investment: Evidence from Niger's 1986 Meningitis Epidemic

By Belinda Archibong and Francis Annan

American Economic Review, May 2017

This paper examines whether disease burdens, especially prevalent in the tropics, contribute significantly to widening gender gaps in educational attainment. We estimate the impact of sudden exposure to the 1986 meningitis epidemic in Niger on girls' educ...

Spite and Development

By Ernst Fehr, Karla Hoff, and Mayuresh Kshetramade

American Economic Review, May 2008

Ignorance Is Bliss: An Experimental Study of the Use of Ambiguity and Vagueness in the Coordination Games with Asymmetric Payoffs

By Marina Agranov and Andrew Schotter

American Economic Journal: Microeconomics, May 2012

We consider a game where one player, the Announcer, has to communicate the value of a payoff relevant state of the world to a set of players who play a coordination game with multiple equilibria. While the Announcer and the players agree that coordination...

Policy Watch: Examining the Justification for Residential Recycling

By Thomas C. Kinnaman

Journal of Economic Perspectives, Fall 2006

There are 8,875 municipalities in the United States that have initiated curbside recycling programs over the past two decades to help reduce residential solid waste. Four thousand of these municipalities encourage recycling by requiring households to pay...

Guaranteed Trouble: The Economic Effects of the Pension Benefit Guaranty Corporation

By Jeffrey R. Brown

Journal of Economic Perspectives, Winter 2008

How did the Pension Benefit Guaranty Corporation, a government corporation created to insure the pensions of workers and retirees in bankrupt firms, end up facing financial distress of its own? How did an organization designed to strengthen retirement sec...

On the Salience of Ethnic Conflict

By Joan Esteban and Debraj Ray

American Economic Review, December 2008

A classical theme in social analysis views economic class divisions as the main cause of social conflict. Yet many, if not most of the conflicts we observe today appear to be ethnic in nature. It appears that the "vertical" nature of class divisions is of...

American and European Economics and Economists

By Bruno S. Frey and Reiner Eichenberger

Journal of Economic Perspectives, Fall 1993

America and Europe differ with regard to what economics is understood to be, how it is practiced, and how professional academic economists behave. Specifically, 1) American (U.S. and Canadian) economists contribute by far the largest share of journal publ...

Testing Models of Consumer Search Using Data on Web Browsing and Purchasing Behavior

By Babur De Los Santos, Ali Hortaçsu, and Matthijs R. Wildenbeest

American Economic Review, October 2012

Using a large dataset on web browsing and purchasing behavior we test to what extent consumers are searching in accordance to various search models. We find that the benchmark model of sequential search with a known price distribution can be rejected base...