Front Matter

American Economic Journal: Microeconomics, August 2021

College Admission with Multidimensional Privileges: The Brazilian Affirmative Action Case

By Orhan Aygün and Inácio Bó

American Economic Journal: Microeconomics, August 2021

In 2012, Brazilian public universities were mandated to use affirmative action policies for candidates from racial and income minorities. We show that the policy makes the students' affirmative action status a strategic choice and may reject high-achievin...

Communities, Co-ops, and Clubs: Social Capital and Incentives in Large Collective Organizations

By Joshua A. Jacobs, Aaron M. Kolb, and Curtis R. Taylor

American Economic Journal: Microeconomics, August 2021

We study a continuous-time organization design problem. Each member's output is an imperfect signal of his underlying effort, and each member's utility from remaining in the organization is endogenous to other members' efforts. Monetary transfers are assu...

Inducing Cooperation through Weighted Voting and Veto Power

By Antonin Macé and Rafael Treibich

American Economic Journal: Microeconomics, August 2021

We study the design of voting rules for committees representing heterogeneous groups (countries, states, districts) when cooperation among groups is voluntary. While efficiency recommends weighting groups proportionally to their stakes, we show that accou...

Utilitarian Aggregation with Heterogeneous Beliefs

By Antoine Billot and Xiangyu Qu

American Economic Journal: Microeconomics, August 2021

The utilitarian aggregation rule requires social utility and beliefs to be a convex combination of individual utilities and beliefs, respectively. Since, in the case of belief heterogeneity, the standard Pareto condition is incompatible with such a separa...

Policy Experimentation in Committees: A Case against Veto Rights under Redistributive Constraints

By Vincent Anesi and T. Renee Bowen

American Economic Journal: Microeconomics, August 2021

We study optimal policy experimentation by a committee. We consider a dynamic bargaining game in which committee members choose either a risky reform or a safe alternative each period. When no redistribution is allowed, the unique equilibrium outcome is g...

Information Redundancy Neglect versus Overconfidence: A Social Learning Experiment

By Marco Angrisani, Antonio Guarino, Philippe Jehiel, and Toru Kitagawa

American Economic Journal: Microeconomics, August 2021

We study social learning in a continuous action space experiment. Subjects, acting in sequence, state their beliefs about the value of a good after observing their predecessors' statements and a private signal. We compare the behavior in the laboratory wi...

Experimentation with Self-Serving Attribution Biases

By Nina Hestermann and Yves Le Yaouanq

American Economic Journal: Microeconomics, August 2021

We study an experimentation problem in a situation where the outcomes depend on the decision-maker's intrinsic ability and on an external variable. We analyze the mistakes made by individuals who hold inaccurate prior beliefs about their ability. Overconf...

Russian Retrospectives on Reforms from Yeltsin to Putin

[Symposium: The Economy of Russia]

By Padma Desai

Journal of Economic Perspectives, Winter 2005

The kamikaze crew of liberal reformers, picked by former President Boris Yeltsin in the early 1990s, succeeded in overturning the planned economy and the authoritarian political arrangements of seven decades of Soviet Communism. However, the resulting bre...

Government Financing of R&D: A Mechanism Design Approach

By Saul Lach, Zvika Neeman, and Mark Schankerman

American Economic Journal: Microeconomics, August 2021

We study how to design an optimal government loan program for risky R&D projects with positive externalities. With adverse selection, the optimal government contract involves a high interest rate but nearly zero cofinancing by the entrepreneur. This contr...

Common Ownership in America: 1980–2017

By Matthew Backus, Christopher Conlon, and Michael Sinkinson

American Economic Journal: Microeconomics, August 2021

We empirically assess the implications of the common ownership hypothesis from a historical perspective using the set of S&P 500 firms from 1980 to 2017. We show that the dramatic rise in common ownership in the time series is driven primarily by the rise...

Growing Oligopolies, Prices, Output, and Productivity

By Sharat Ganapati

American Economic Journal: Microeconomics, August 2021

American industries have grown more concentrated over the last 40 years. In the absence of productivity innovation, this should lead to price hikes and output reductions, decreasing consumer welfare. With US census data from 1972 to 2012, I use price data...

Vertical Agreements and User Access

By Germain Gaudin and Alexander White

American Economic Journal: Microeconomics, August 2021

Platforms acting as sales channels for producers often charge users for access via a subscription fee or a markup on hardware. We compare two common forms of vertical pricing agreement that platforms use with sellers: per unit and proportional fees. In pa...

Managerial Style and Attention

By Wouter Dessein and Tano Santos

American Economic Journal: Microeconomics, August 2021

Is firm behavior mainly driven by its environment or rather by the characteristics of its managers? We develop a cognitive theory of manager fixed effects, where the allocation of managerial attention determines firm behavior. We show that in complex envi...

Product Recalls and Firm Reputation

By Boyan Jovanovic

American Economic Journal: Microeconomics, August 2021

Product recall data and information on stock price reactions to recalls are used to estimate the value of reputation in a model in which product quality is not contractible. A recall is the result of a product defect that signals low effort. The recall tr...

A Bargaining-Based Model of Security Design

By Matan Tsur

American Economic Journal: Microeconomics, August 2021

This paper studies how security design affects project outcomes. Consider a firm that raises capital for multiple projects by offering investors a share of the revenues. The revenue of each project is determined ex post through bargaining with a buyer of ...

Front Matter

American Economic Review, August 2021

Lapse-Based Insurance

By Daniel Gottlieb and Kent Smetters

American Economic Review, August 2021

Most individual life insurance policies lapse, with lapsers cross-subsidizing non-lapsers. We show that policies and lapse patterns predicted by standard rational expectations models are the opposite of those observed empirically. We propose two behaviora...

Daily Labor Supply and Adaptive Reference Points

By Neil Thakral and Linh T. Tô

American Economic Review, August 2021

This paper provides field evidence on how reference points adjust, a degree of freedom in reference-dependence models. Examining this in the context of cabdrivers' daily labor-supply behavior, we ask how the within-day timing of earnings affects decisions...

Autopsy on an Empire: Understanding Mortality in Russia and the Former Soviet Union

[Symposium: The Economy of Russia]

By Elizabeth Brainerd and David M. Cutler

Journal of Economic Perspectives, Winter 2005

Male life expectancy at birth fell by over six years in Russia between 1989 and 1994. Many other countries of the former Soviet Union saw similar declines, and female life expectancy fell as well. Using cross-country and Russian household survey data, we ...