Experiments on Decisions under Uncertainty: A Theoretical Framework

By Eran Shmaya and Leeat Yariv

American Economic Review, July 2016

The analysis of lab data entails a joint test of the underlying theory and of subjects' conjectures regarding the experimental design itself, how subjects frame the experiment. We provide a theoretical framework for analyzing such conjectures. We use expe...

Management Quality and Firm Hierarchy in Industry Equilibrium

By Cheng Chen

American Economic Journal: Microeconomics, November 2017

I incorporate a monitoring-based firm hierarchy into an industry equilibrium model with heterogeneous firms. I then use the theory to study aggregate impacts of an economy-wide improvement in monitoring efficiency. This shock generates a selection effect,...

Zipf's Law and the Growth of Cities

By Xavier Gabaix

American Economic Review, May 1999

Leakage, Welfare, and Cost-Effectiveness of Carbon Policy

By Kathy Baylis, Don Fullerton, and Daniel H. Karney

American Economic Review, May 2013

We extend the model of Fullerton, Karney, and Baylis (2012) to explore cost-effectiveness of unilateral climate policy in the presence of leakage. We ignore the welfare gain from reducing greenhouse gas emissions, and focus on the welfare cost of the emis...

The Judge, the Politician, and the Press: Newspaper Coverage and Criminal Sentencing across Electoral Systems

By Claire S. H. Lim, James M. Snyder Jr., and David Strömberg

American Economic Journal: Applied Economics, October 2015

We study how media environments interact with political institutions that structure the accountability of public officials. Specifically, we quantify media influence on the behavior of US state court judges. We analyze around 1.5 million criminal sente...

Do College Graduates Serving as Village Officials Help Rural China?

By Guojun He and Shaoda Wang

American Economic Journal: Applied Economics, October 2017

This study estimates the effect of improved bureaucrat quality on poverty alleviation by exploring a unique human capital reallocation policy in China—the College Graduate Village Officials (CGVOs) program. We find that introducing CGVOs into the vi...

Incomplete Environmental Regulation, Imperfect Competition, and Emissions Leakage

By Meredith L. Fowlie

American Economic Journal: Economic Policy, August 2009

Environmental regulation of industrial pollution is often incomplete; regulations apply to only a subset of facilities contributing to a pollution problem. Policymakers are increasingly concerned about the emissions leakage that may occur if unregulate...

Why Don't Households Smooth Consumption? Evidence from a $25 Million Experiment

By Jonathan A. Parker

American Economic Journal: Macroeconomics, October 2017

This paper evaluates theoretical explanations for the propensity of households to increase spending in response to the arrival of predictable, lump-sum payments, using households in the Nielsen Consumer Panel who received $25 million in randomly distribut...

Stability in Supply Chain Networks

By Michael Ostrovsky

American Economic Review, June 2008

This paper studies matching in vertical networks, generalizing the theory of matching in two-sided markets. It gives sufficient conditions for the existence of stable networks and presents an algorithm for finding two of them. One is the best stable ne...

Vertical Integration and Input Flows

By Enghin Atalay, Ali Hortaçsu, and Chad Syverson

American Economic Review, April 2014

We use broad-based yet detailed data from the economy's goods-producing sectors to investigate firms' ownership of production chains. It does not appear that vertical ownership is primarily used to facilitate transfers of goods along the production chai...

Unilateral Divorce, the Decreasing Gender Gap, and Married Women's Labor Force Participation

By Raquel Fernández and Joyce Wong

American Economic Review, May 2014

Married women's labor force participation (LFP) increased dramatically in the United States between the 1940 and 1960 cohort. The two cohorts lived under different divorce regimes (unilateral divorce rather than mutual consent). The 1960 cohort also had a...

Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?

By James R. Tybout

Journal of Economic Literature, March 2000

The manufacturing sectors of developing countries have traditionally been relatively protected. They have also been subject to heavy regulation, much of which has favored large firms. Accordingly, it is often argued that in these countries: (1) markets to...

A Trapped-Factors Model of Innovation

By Nicholas Bloom, Paul M. Romer, Stephen J. Terry, and John Van Reenen

American Economic Review, May 2013

We explain a counterintuitive empirical finding: Firms facing more import competition do more innovation. In our model, factors are trapped inside a firm. An increase in import competition encourages a firm to innovate by reducing the opportunity cost of ...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Fall 2001

Corporate Incentives and Nuclear Safety

By Catherine Hausman

American Economic Journal: Economic Policy, August 2014

Following electricity market restructuring, approximately half of all commercial US nuclear power reactors were sold by price-regulated public utilities to independent power producers. At the time of the sales, some policymakers raised concerns that these...

Inheritances, Intergenerational Transfers, and the Accumulation of Health

By Katherine Grace Carman

American Economic Review, May 2013

This paper considers the mechanisms behind a positive correlation between inheritances and health. First, there may merely be a correlation: those from families with enough wealth to provide an inheritance tend to have better health. Second, financial res...

Did Science Cause the Industrial Revolution?

By Cormac Ó Gráda

Journal of Economic Literature, March 2016

The role of science and technology in the First Industrial Revolution is still contested. Some scholars, focusing on the textiles sector, argue that skilled and talented artisans with no scientific training were mainly responsible for the key inventions; ...

Distinguishing Probability Weighting from Risk Misperceptions in Field Data

By Levon Barseghyan, Francesca Molinari, Ted O'Donoghue, and Joshua C. Teitelbaum

American Economic Review, May 2013

We outline a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries...

Aftershocks: The Impact of Clinic Violence on Abortion Services

By Mireille Jacobson and Heather Royer

American Economic Journal: Applied Economics, January 2011

Between 1973 and 2003, abortion providers in the United States were the targets of over 300 acts of extreme violence. Using unique data on attacks and on abortions, abortion providers, and births, we examine how anti-abortion violence has affected provide...

Rational Expectations in Games

By Robert J. Aumann and Jacques H. Dreze

American Economic Review, March 2008

A player i's actions in a game are determined by her beliefs about other players; these depend on the game's real-life context, not only its formal description. Define a game situation as a game together with such beliefs; call the beliefs— and i...