Front Matter

American Economic Journal: Microeconomics, May 2023

Dynamic Privacy Choices

By Shota Ichihashi

American Economic Journal: Microeconomics, May 2023

I study a dynamic model of consumer privacy and platform data collection. In each period consumers choose their level of platform activity. Greater activity generates more information about the consumer, thereby increasing platform profits. When the platf...

Economic Theory and Experimental Economics

By Larry Samuelson

Journal of Economic Literature, March 2005

This paper explores the questions of how economic theory can be used to design and interpret experiments and how experimental results can be used to construct and interpret economic theories. The relationship between economic theory and experiments is mod...

Blind Disclosure

By Aaron Kolb, Marilyn Pease, Daniel W. Sacks, and Joshua Quick

American Economic Journal: Microeconomics, May 2023

We develop and test a theory of blind disclosure. A sender chooses whether to disclose information based on a preliminary, private signal. In the unique equilibrium, contrary to the literature's canonical unraveling result, senders disclose only if their ...

Optimal Nonlinear Pricing with Data-Sensitive Consumers

By Daniel Krähmer and Roland Strausz

American Economic Journal: Microeconomics, May 2023

We study monopolistic screening when some consumers are data sensitive and incur a privacy cost if their purchase reveals information to the monopolist. The monopolist discriminates between data-sensitive and classical consumers using privacy mechanisms t...

Competition in Pricing Algorithms

By Zach Y. Brown and Alexander MacKay

American Economic Journal: Microeconomics, May 2023

We document new facts about pricing technology using high-frequency data, and we examine the implications for competition. Some online retailers employ technology that allows for more frequent price changes and automated responses to price changes by riva...

Targeted Product Design

By Heski Bar-Isaac, Guillermo Caruana, and Vicente Cuñat

American Economic Journal: Microeconomics, May 2023

We propose an intuitive representation of product design in which firms locate inside a circle and consumers in its outer circumference. Designs trade off horizontal and vertical transport costs. Our setting encompasses all linear demand rotations. Firms ...

The Good, the Bad, and the Complex: Product Design with Imperfect Information

By Vladimir Asriyan, Dana Foarta, and Victoria Vanasco

American Economic Journal: Microeconomics, May 2023

We study the joint determination of product quality and complexity. In our model complexity affects how difficult it is for an agent to acquire information about product quality. An agent can accept or reject a product proposed by a designer, who can affe...

Ad Clutter, Time Use, and Media Diversity

By Simon P. Anderson and Martin Peitz

American Economic Journal: Microeconomics, May 2023

We introduce advertising congestion along with a time use model of consumer choice among media. Both consumers and advertisers multihome. Higher equilibrium advertising levels ensue on less popular media platforms because platforms treat consumer attentio...

Reference Dependence and Attribution Bias: Evidence from Real-Effort Experiments

By Benjamin Bushong and Tristan Gagnon-Bartsch

American Economic Journal: Microeconomics, May 2023

We document a form of attribution bias wherein people wrongly ascribe sensations of positive or negative surprise to the underlying disutility of a real-effort task. Participants in our experiments learned from experience about two unfamiliar tasks, one m...

The Doors of Perception: Theory and Evidence of Frame-Dependent Rationalizability

By Gary Charness and Alessandro Sontuoso

American Economic Journal: Microeconomics, May 2023

We investigate how strategic behavior is affected by the set of notions (frames) used when thinking about the game. In our games the action set consists of visual objects: each player must privately choose one, trying to match the counterpart's choice. We...

Reference Pricing as a Deterrent to Entry: Evidence from the European Pharmaceutical Market

By Luca Maini and Fabio Pammolli

American Economic Journal: Microeconomics, May 2023

External reference pricing (ERP), the practice of benchmarking domestic drug prices to foreign prices, generates an incentive for firms to withhold products from low-income countries. Using a novel moment inequality approach, we estimate a structural mode...

Complexity and Procedural Choice

By James Banovetz and Ryan Oprea

American Economic Journal: Microeconomics, May 2023

We test the core ideas of the "automata" approach to bounded rationality, using simple experimental bandit tasks. Optimality requires subjects to use a moderately complex decision procedure, but most subjects in our baseline condition instead use simpler ...

Development

By Joseph A. Schumpeter

Journal of Economic Literature, March 2005

The present article introduces Development, a new, unpublished and hitherto unknown article by Joseph A. Schumpeter from 1932. Development is remarkable because it significantly adds to Schumpeter's known works on a number of issues that were central to h...

Biased Beliefs in Search Markets

By Tobias Gamp and Daniel Krähmer

American Economic Journal: Microeconomics, May 2023

We study the implications of biased consumer beliefs for search market outcomes in the seminal framework due to Diamond (1971). Biased consumers base their search strategy on a belief function that specifies for any (true) distribution of utility offers i...

At the Helm, Kirk or Spock? The Pros and Cons of Charismatic Leadership

By Benjamin E. Hermalin

American Economic Journal: Microeconomics, May 2023

Charismatic leaders are often desired. At the same time, experience, especially with demagogues, as well as social science studies, raise doubts about such leaders. This paper offers explanations for charismatic leadership's "mixed report card." It offers...

Too Good to Be True? Retention Rules for Noisy Agents

By Francisco Espinosa ⓡ Debraj Ray

American Economic Journal: Microeconomics, May 2023

An agent who privately knows his type seeks to be retained by a principal. Agents signal their type with some ambient noise, but can alter this noise, perhaps at some cost. Our main finding is that in equilibrium, the principal treats extreme signals in e...

Learning by Choosing: Career Concerns with Observable Actions

By T. Tony Ke, Christopher Li, and Mikhail Safronov

American Economic Journal: Microeconomics, May 2023

This paper explores potential inefficiencies of incomplete contracts in a dynamic career concerns context. In a firm-worker relationship, the worker performs public tasks that have trade-offs between productivity and informativeness. We show that the firs...

Relative Wealth Concerns, Executive Compensation, and Managerial Risk-Taking

By Qi Liu and Bo Sun

American Economic Journal: Microeconomics, May 2023

This paper theoretically examines how relative wealth concerns affect equilibrium contracting and systemic risk-taking. We find that such externalities can generate pay for luck as an equilibrium strategy. In expectation of pay for luck in other firms, ty...