Front Matter

American Economic Journal: Microeconomics, November 2022

Screening Dominance: A Comparison of Noisy Signals

By David Lagziel and Ehud Lehrer

American Economic Journal: Microeconomics, November 2022

This paper studies the impact of noisy signals on screening processes. It deals with a decision problem in which a decision-maker screens a set of elements based on noisy unbiased evaluations. Given that the decision-maker uses threshold strategies, we sh...

Sequential Screening with Type-Enhancing Investment

By Bin Liu and Jingfeng Lu

American Economic Journal: Microeconomics, November 2022

Due to the well-known efficiency–rent extraction trade-off, the optimal mechanism in a pure screening environment (e.g., revenue maximization in auctions or cost minimization in procurement) typically calls for distortions in allocative efficiency when ...

The Effect of Sequentiality on Cooperation in Repeated Games

By Riccardo Ghidoni and Sigrid Suetens

American Economic Journal: Microeconomics, November 2022

Sequentiality of moves in an infinitely repeated prisoner's dilemma does not change the conditions under which mutual cooperation can be supported in equilibrium relative to simultaneous decision-making. The nature of the interaction is different, however...

Disclosure and Favoritism in Sequential Elimination Contests

By Qiang Fu and Zenan Wu

American Economic Journal: Microeconomics, November 2022

We consider a two-stage contest, in which only a subset of contestants enters the finale. We explore the optimal policy for disclosing contestants' interim status after the preliminary round, i.e., their interim ranking and elimination decision. The optim...

Games Played by Teams of Players

By Jeongbin Kim, Thomas R. Palfrey, and Jeffrey R. Zeidel

American Economic Journal: Microeconomics, November 2022

We develop a general framework for analyzing games where each player is a team and members of the same team all receive the same payoff. The framework combines noncooperative game theory with collective choice theory, and is developed for both strategic f...

Transition Dynamics in Equilibrium Search

By Ş. Nuray Akın and Brennan C. Platt

American Economic Journal: Microeconomics, November 2022

We study a dynamic equilibrium search model where sellers differ in their urgency to liquidate an asset. Buyers strategically make price offers without knowing a given seller's urgency. We study liquidity and price dynamics on the transition path after an...

Communication and Cooperation in Markets

By S. Nageeb Ali and David A. Miller

American Economic Journal: Microeconomics, November 2022

Many markets rely on traders truthfully communicating who has cheated in the past and ostracizing those traders from future trade. This paper investigates when truthful communication is incentive compatible. We find that if each side has a myopic incentiv...

Too Much Data: Prices and Inefficiencies in Data Markets

By Daron Acemoglu, Ali Makhdoumi, Azarakhsh Malekian, and Asu Ozdaglar

American Economic Journal: Microeconomics, November 2022

When a user shares her data with online platforms, she reveals information about others. In such a setting, externalities depress the price of data because once a user's information is leaked by others, she has less reason to protect her data and privacy....

Annotated Listing of New Books

Journal of Economic Literature, December 2003

What Should a Firm Know? Protecting Consumers' Privacy Rents

By Daniel Bird and Zvika Neeman

American Economic Journal: Microeconomics, November 2022

A monopolistic firm observes a signal about the state of the world and then makes a take-it-or-leave-it offer to an uninformed consumer who has recourse to some outside option. We provide a geometric characterization of the firm's information structure th...

Reaping the Informational Surplus in Bayesian Persuasion

By Ronen Gradwohl, Niklas Hahn, Martin Hoefer, and Rann Smorodinsky

American Economic Journal: Microeconomics, November 2022

The Bayesian persuasion model studies communication between an informed sender and a receiver with a payoff-relevant action, emphasizing the ability of a sender to extract maximal surplus from his informational advantage. In this paper, we study a setting...

A Theory of One-Size-Fits-All Recommendations

By Doron Levit and Anton Tsoy

American Economic Journal: Microeconomics, November 2022

One-size-fits-all recommendations are common in many contexts, including those with a widespread heterogeneity. We propose a model that rationalizes this phenomenon. An expert recommends publicly to two agents whether to adopt a policy. The expert is priv...

Rational Inattention in the Infield

By Vivek Bhattacharya and Greg Howard

American Economic Journal: Microeconomics, November 2022

This paper provides evidence of rational inattention by experienced professionals in strategic interactions. We add rational inattention to a game of matching pennies with state-dependent payoffs. Unlike the full-information, mixed-strategy Nash equilibri...

Auction Mechanisms and Treasury Revenue: Evidence from the Chinese Experiment

By Klenio Barbosa, Dakshina G. De Silva, Liyu Yang, and Hisayuki Yoshimoto

American Economic Journal: Microeconomics, November 2022

This paper exploits a large-scale auction experiment conducted by two Chinese government treasury security issuers—the Chinese Development Bank and the Export-Import Bank—to investigate whether treasury securities should be sold through uniform price ...

License Complementarity and Package Bidding: US Spectrum Auctions

By Mo Xiao and Zhe Yuan

American Economic Journal: Microeconomics, November 2022

US spectrum licenses cover geographically distinct areas and often complement each other. A bidder seeking to acquire multiple licenses is exposed to the risk of winning only isolated patches. Using Auction 73 data, we model the bidding process as an entr...

Deposit Requirements in Auctions

By Xiaogang Che, Tong Li, Jingfeng Lu, and Xiaoyong Zheng

American Economic Journal: Microeconomics, November 2022

We examine optimal auction design when buyers may receive future outside offers. The winning bidder may choose to default upon observing her outside offer. Under the optimal mechanism, the bidder with the highest value wins if and only if her value is abo...

On the Foundations of Ex Post Incentive-Compatible Mechanisms

By Takuro Yamashita and Shuguang Zhu

American Economic Journal: Microeconomics, November 2022

This paper considers an interdependent-value robust mechanism design problem, where the principal has little knowledge about the agent's belief. Although ex post incentive-compatible (EPIC) mechanisms can implement allocations without any knowledge about ...

Expectations-Based Loss Aversion May Help Explain Seemingly Dominated Choices in Strategy-Proof Mechanisms

By Bnaya Dreyfuss, Ori Heffetz, and Matthew Rabin

American Economic Journal: Microeconomics, November 2022

Deferred acceptance (DA), a widely implemented algorithm, is meant to improve allocations: under classical preferences, it induces preference-concordant rankings. However, recent evidence shows that—in both real, large-stakes applications and experiment...

Robust Minimal Instability of the Top Trading Cycles Mechanism

By Battal Doğan and Lars Ehlers

American Economic Journal: Microeconomics, November 2022

In the context of priority-based allocation of objects, we formulate methods to compare assignments in terms of their stability. We introduce three basic properties that a reasonable stability comparison should satisfy. We show that for any stability comp...