Risk Preference: A View from Psychology

[Symposium: Risk in Economics and Psychology]

By Rui Mata, Renato Frey, David Richter, Jürgen Schupp, and Ralph Hertwig

Journal of Economic Perspectives, Spring 2018

Psychology offers conceptual and analytic tools that can advance the discussion on the nature of risk preference and its measurement in the behavioral sciences. We discuss the revealed and stated preference measurement traditions, which have coexisted...

Space, the Final Economic Frontier

By Matthew Weinzierl

Journal of Economic Perspectives, Spring 2018

After decades of centralized control of economic activity in space, NASA and US policymakers have begun to cede the direction of human activities in space to commercial companies. NASA garnered more than 0.7 percent of GDP in the mid-1960s, but is only ...

Dave Donaldson: Winner of the 2017 Clark Medal

By Daron Acemoglu

Journal of Economic Perspectives, Spring 2018

The 2017 John Bates Clark Medal of the American Economic Association was awarded to Dave Donaldson for his path-breaking contributions in international trade. Donaldson’s work sheds light on some of the central questions of international economics, ...

Retrospectives: Adam Smith's Discovery of Trade Gravity

By Bruce Elmslie

Journal of Economic Perspectives, Spring 2018

The gravity equation is a current workhorse of empirical trade theory. It is generally acknowledged that this theory, which relates the extent of trade between countries to their respective sizes, distances, and relative trade barriers, was first develo...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Spring 2018

Front Matter

AEA Papers and Proceedings, May 2018

Foreword

By Olivier Blanchard

AEA Papers and Proceedings, May 2018

Editors' Introduction

By William R. Johnson and Kelly Markel

AEA Papers and Proceedings, May 2018

Private Paternalism, the Commitment Puzzle, and Model-Free Equilibrium

By David Laibson

AEA Papers and Proceedings, May 2018

Paternalism is a policy that advances an individual's interests by restricting his or her freedom. In a setting with present-biased agents, I characterize the scope of private paternalism—paternalism implemented by private institutions. Private patern...

Algorithmic Fairness

By Jon Kleinberg, Jens Ludwig, Sendhil Mullainathan, and Ashesh Rambachan

AEA Papers and Proceedings, May 2018

Concerns that algorithms may discriminate against certain groups have led to numerous efforts to 'blind' the algorithm to race. We argue that this intuitive perspective is misleading and may do harm. Our primary result is exceedingly simple, yet often ove...

Welfarism's Envy Problem Extends to Popular Judgments

By Matthew Weinzierl

AEA Papers and Proceedings, May 2018

Economists use a welfarist approach to policy evaluation, but doing so can lead to recommendations that violate seemingly wise non-welfarist principles. I explore one example: the proper tax policy response to envy. Using a novel survey, I find that a maj...

Quadratic Voting: How Mechanism Design Can Radicalize Democracy

By Steven P. Lalley and E. Glen Weyl

AEA Papers and Proceedings, May 2018

Can mechanism design save democracy? We propose a simple design that offers a chance: individuals pay for as many votes as they wish using a number of "voice credits" in the votes they buy. Only quadratic cost induces marginal costs linear in votes purcha...

Should We Treat Data as Labor? Moving beyond "Free"

By Imanol Arrieta-Ibarra, Leonard Goff, Diego Jiménez-Hernández, Jaron Lanier, and E. Glen Weyl

AEA Papers and Proceedings, May 2018

In the digital economy, user data is typically treated as capital created by corporations observing willing individuals. This neglects users' roles in creating data, reducing incentives for users, distributing the gains from the data economy unequally, an...

What Can Machines Learn, and What Does It Mean for Occupations and the Economy?

By Erik Brynjolfsson, Tom Mitchell, and Daniel Rock

AEA Papers and Proceedings, May 2018

Advances in machine learning (ML) are poised to transform numerous occupations and industries. This raises the question of which tasks will be most affected by ML. We apply the rubric evaluating task potential for ML in Brynjolfsson and Mitchell (2017) to...

Modeling Automation

By Daron Acemoglu and Pascual Restrepo

AEA Papers and Proceedings, May 2018

Modeling automation as factor-augmenting technological change has unappealing implications. Instead, modeling it as the process of machines replacing tasks previously performed by labor is both descriptively realistic and leads to distinct and plausible p...

A Method to Link Advances in Artificial Intelligence to Occupational Abilities

By Edward W. Felten, Manav Raj, and Robert Seamans

AEA Papers and Proceedings, May 2018

Prior episodes of automation have led to economic growth and also to many changes in the workplace. We expect the same from artificial intelligence (AI). The link between AI and labor is complex, however. To assist researchers and policymakers, we provide...

Human Judgment and AI Pricing

By Ajay Agrawal, Joshua S. Gans, and Avi Goldfarb

AEA Papers and Proceedings, May 2018

This paper examines the pricing choices of a provider of artificial intelligence (AI) services. It does so in the context of AI providing predictions to a decision-maker who also exercises what we term judgment; specifically, the discovery of payoffs from...

Estimating Heterogeneous Consumer Preferences for Restaurants and Travel Time Using Mobile Location Data

By Susan Athey, David Blei, Robert Donnelly, Francisco Ruiz, and Tobias Schmidt

AEA Papers and Proceedings, May 2018

We estimate a model of consumer choices over restaurants using data from several thousand anonymous mobile phone users. Restaurants have latent characteristics (whose distribution may depend on restaurant observables) that affect consumers' mean utility a...

The Potential of Digital Credit to Bank the Poor

By Daniel Björkegren and Darrell Grissen

AEA Papers and Proceedings, May 2018

Many households in developing countries lack access to credit: physically providing small loans to poor and remote populations is costly. However, the digitization of developing countries enables a new model: digital credit delivered directly via mobile p...

Estimating Economic Characteristics with Phone Data

By Joshua E. Blumenstock

AEA Papers and Proceedings, May 2018

Historically, economists have relied heavily on survey-based data collection to measure social and economic well-being. Here, we investigate the extent to which the "digital footprints" of an individual can be used to infer his or her socioeconomic charac...