Product Differentiation and Oligopoly: A Network Approach

By Bruno Pellegrino

American Economic Review, April 2025

I present a new theory of oligopoly and markups in general equilibrium, based on an innovative, scalable hedonic demand system, which I take to the data for the universe of US public firms. In my model, firms compete in a network of product market rivalri...

Weighted Linear Discrete Choice

By Christopher P. Chambers, Yusufcan Masatlioglu, Paulo Natenzon, and Collin Raymond

American Economic Review, April 2025

We introduce a new model of stochastic choice that assigns each choice option a utility, along with a salience parameter reflecting economic frictions. We characterize our model behaviorally and investigate its comparative statics properties. We show that...

Fighting Climate Change: International Attitudes toward Climate Policies

By Antoine Dechezleprêtre, Adrien Fabre, Tobias Kruse, Bluebery Planterose, Ana Sanchez Chico, and Stefanie Stantcheva

American Economic Review, April 2025

This paper explores global perceptions and understanding of climate change and policies, examining factors that influence support for climate action and the impact of different types of information. We conduct large-scale surveys with 40,000 respondents f...

When Money Dies: The Dynamics of Speculative Hyperinflations

By Guillaume Rocheteau

American Economic Review, April 2025

How quickly does a fiat money become valueless? I study the speculative hyperinflation equilibria of continuous-time economies with decentralized markets where money is essential. I establish necessary and sufficient conditions under which money dies in f...

Cultural Distance and Ethnic Civil Conflict

By Eleonora Guarnieri

American Economic Review, April 2025

Ethnically diverse countries are more prone to conflict, but why do some groups engage in conflict, while others do not? I show that civil conflict in Africa is explained by ethnic groups' cultural distance to the central government: an increase in cultur...

International Spillovers and Water Quality in Rivers: Do Countries Free Ride?

By Hilary Sigman

American Economic Review, September 2002

Front Matter

American Economic Journal: Microeconomics, May 2025

Price and Choose

By Federico Echenique and Matías Núñez

American Economic Journal: Microeconomics, May 2025

We describe a sequential mechanism that fully implements the set of efficient outcomes in environments with quasi-linear utilities. The mechanism asks agents to take turns in defining prices for each outcome, with a final player choosing an outcome for al...

Aggressive Pivots and Entrepreneurial Skill

By Xuelin Li and Martin Szydlowski

American Economic Journal: Microeconomics, May 2025

We study pivots as signaling devices in a dynamic experimentation model. An entrepreneur receives funding from an investor and has private information about a project, which requires costly experimentation to succeed. The entrepreneur has a real option to...

Complementary Bidding and the Collusive Arrangement: Evidence from an Antitrust Investigation

By Robert Clark, Decio Coviello, and Adriano De Leverano

American Economic Journal: Microeconomics, May 2025

Clustered bids and a missing mass of nearly tied bids have both been proposed as markers of collusion. We present causal empirical evidence from an actual procurement cartel that bidding involves both clustering and a gap around the winning bid. We suppor...

Reservation Wages: An Analysis of the Effects of Reservations on Employment of American Indian Men

By J. Gitter and Patricia B. Reagan

American Economic Review, September 2002

Optimal Contract Regulation in Selection Markets

By Yehuda John Levy and André Veiga

American Economic Journal: Microeconomics, May 2025

We model competitive insurance markets with continuous cost-types. A regulator sets minimum and maximum coverage levels and a fee for nonbuyers. Equilibrium is unique if the type distribution is log-concave. Increasing the nonpurchase fee increases welfar...

Search Costs and Context Effects

By Heiko Karle, Florian Kerzenmacher, Heiner Schumacher, and Frank Verboven

American Economic Journal: Microeconomics, May 2025

Empirical search cost estimates are often large and increasing in the size of the transaction. We conduct an online search experiment in which we manipulate the price scale while keeping the physical search effort per price quote constant. Additionally, w...

Ideological Bias and Trust in Information Sources

By Matthew Gentzkow, Michael B. Wong, and Allen T. Zhang

American Economic Journal: Microeconomics, May 2025

We study the role of endogenous trust in amplifying ideological bias. Agents in our model learn a sequence of states from sources whose accuracy is ex ante uncertain. Agents learn these accuracies by comparing their own reasoning about the states based on...

Strategic Thinking Skills: A Key to Collective Economic Success

By Syngjoo Choi, Seonghoon Kim, and Wooyoung Lim

American Economic Journal: Microeconomics, May 2025

We conduct a large-scale experiment to measure elementary aspects of strategic thinking skills and their linkage to labor market outcomes. Two incentivized measures of higher-order rationality and backward induction are developed. Males' (females') strate...

Severance Pay in an Optimal Contract

By Borys Grochulski, Russell Wong, and Yuzhe Zhang

American Economic Journal: Microeconomics, May 2025

We study the incentive role of severance compensation. In a canonical principal-agent model, we introduce exogenous job destruction risk and show that compensation following job destruction can reduce overall incentive costs. To mitigate the risk of ineff...

Free Entry in a Cournot Market with Overlapping Ownership

By Xavier Vives and Orestis Vravosinos

American Economic Journal: Microeconomics, May 2025

We examine the effects of overlapping ownership among existing firms deciding whether to enter a product market. We show that in most cases—and especially when overlapping ownership is already widespread—an increase in the extent of overlapping owners...

Persistent Protests

By Sofia Correa

American Economic Journal: Microeconomics, May 2025

A continuum of citizens with heterogeneous opportunity costs participates in a protest with well-defined demands. As long as the government doesn't concede, it pays a cost increasing in time and participation. Citizens who are part of the victory team enj...

R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium

By Bruno Cassiman and Reinhilde Veugelers

American Economic Review, September 2002

Front Matter

American Economic Journal: Economic Policy, May 2025