Coordination with Differential Time Preferences: Experimental Evidence

By Marina Agranov, Jeongbin Kim, and Leeat Yariv

American Economic Review: Insights, December 2024

The experimental literature on repeated games has largely focused on settings where players discount the future identically. In applications, however, interactions often occur between players whose time preferences differ. We study experimentally the effe...

Large Shocks Travel Fast

By Alberto Cavallo, Francesco Lippi, and Ken Miyahara

American Economic Review: Insights, December 2024

We document a sizeable increase in the frequency of price adjustments following the large energy shocks of 2022. We use a tractable New Keynesian model, calibrated to the preshock data, to interpret such a pattern. The calibration highlights the state dep...

The AI Dilemma: Growth versus Existential Risk

By Charles I. Jones

American Economic Review: Insights, December 2024

Advances in artificial intelligence (AI) are a double-edged sword. On the one hand, they may increase economic growth as AI augments our ability to innovate. On the other hand, many experts worry that these advances entail existential risk: creating a sup...

Tax Reform and Automatic Stabilization

By Thomas J. Kniesner and James P. Ziliak

American Economic Review, June 2002

An income tax provides implicit insurance by dampening the variability of disposable income and consumption. Using an empirical framework derived from the consumption insurance literature and data from the Panel Study of Income Dynamics we examine the eff...

Can Expected Utility Theory Explain Gambling?

By Roger Hartley and Lisa Farrell

American Economic Review, June 2002

We investigate the ability of expected utility theory to account for simultaneous gambling and insurance. Contrary to a previous claim that borrowing and lending in perfect capital markets removes the demand for gambles, we show expected utility theory wi...

Front Matter

American Economic Review, December 2024

Decisions under Risk Are Decisions under Complexity

By Ryan Oprea

American Economic Review, December 2024

We provide evidence that classic lottery anomalies like probability weighting and loss aversion are not special phenomena of risk. They also arise (and often with equal strength) when subjects evaluate deterministic, positive monetary payments that have b...

Curbing Leakage in Public Programs: Evidence from India's Direct Benefit Transfer Policy

By Prabhat Barnwal

American Economic Review, December 2024

Targeted price subsidies create a gap between subsidized and unsubsidized prices. The resulting dual pricing can lead to arbitrage opportunities where intermediaries divert subsidized goods to unintended beneficiaries via the black market. I study India's...

Aiming for the Goal: Contribution Dynamics of Crowdfunding

By Joyee Deb, Aniko Öry, and Kevin R. Williams

American Economic Review, December 2024

We study a dynamic contribution game where investors seek private benefits offered in exchange for contributions, and a single, publicly minded donor values project success. We show that donor contributions serve as costly signals that encourage socially ...

Political Correctness, Social Image, and Information Transmission

By Luca Braghieri

American Economic Review, December 2024

A prominent argument in the political correctness debate is that people feel pressure to publicly espouse sociopolitical views they do not privately hold, and that such misrepresentations might render public discourse less vibrant and informative. This pa...

Loans for the "Little Fellow": Credit, Crisis, and Recovery in the Great Depression

By Sarah Quincy

American Economic Review, December 2024

This paper identifies how bank branching benefited local economies during the Great Depression. Using archival data and narrative evidence, I show how Bank of America's branch network in 1930s California created an internal capital market that diversified...

Beliefs in Repeated Games: An Experiment

By Masaki Aoyagi, Guillaume R. Fréchette, and Sevgi Yuksel

American Economic Review, December 2024

This paper uses a laboratory experiment to study beliefs and their relationship to action and strategy choices in finitely and indefinitely repeated prisoners' dilemma games. We find subjects' elicited beliefs about the other player's action are generally...

The Real State: Inside the Congo's Traffic Police Agency

By Raúl Sánchez de la Sierra, Kristof Titeca, Haoyang (Stan) Xie, Aimable Amani Lameke, and Albert Malukisa Nkuku

American Economic Review, December 2024

This paper provides insight into a corruption scheme in Kinshasa's traffic police agency. First, various data collection branches show that the agency's revenue is five times that from fines and is derived from a coalition of traffic police officials, the...

Contamination Bias in Linear Regressions

By Paul Goldsmith-Pinkham, Peter Hull, and Michal Kolesár

American Economic Review, December 2024

We study regressions with multiple treatments and a set of controls that is flexible enough to purge omitted variable bias. We show these regressions generally fail to estimate convex averages of heterogeneous treatment effects—instead, estimates of eac...

Measuring Science: Performance Metrics and the Allocation of Talent

By Sebastian Hager, Carlo Schwarz, and Fabian Waldinger

American Economic Review, December 2024

We study how performance metrics affect the allocation of talent by exploiting the introduction of the first citation database in science. For technical reasons, it only covered citations from certain journals and years, creating quasi-random variation: s...

Efficiency in Auctions with Private and Common Values: An Experimental Study

By K. Goeree and Theo Offerman

American Economic Review, June 2002

Auctions are generally not efficient when the object's expected value depends on private and common value information. We report a series of first-price auction experiments to measure the degree of inefficiency that occurs with financially motivated bidde...

Bias and Sensitivity under Ambiguity

By Zhen Huo, Marcelo Pedroni, and Guangyu Pei

American Economic Review, December 2024

This paper characterizes the effects of ambiguity aversion under dispersed information. The equilibrium outcome is observationally equivalent to a Bayesian forecast of the fundamental with increased sensitivity to signals and a pessimistic bias. This equi...

Front Matter

Journal of Economic Literature, December 2024

Social Protection in the Developing World

By Abhijit Banerjee, Rema Hanna, Benjamin A. Olken, and Diana Sverdlin Lisker

Journal of Economic Literature, December 2024

Social protection programs have become increasingly widespread in low- and middle-income countries, with their own distinct characteristics to match the environments in which they are operating. This paper reviews the growing literature on the design and ...

The Economics of Social Media

By Guy Aridor, Rafael Jiménez-Durán, Ro'ee Levy, and Lena Song

Journal of Economic Literature, December 2024

We provide a guide to the burgeoning literature on the economics of social media. We first define social media platforms and highlight their unique features. We then synthesize the main lessons from the empirical economics literature and organize them aro...