Markets: Ready-Mixed Concrete

By Chad Syverson

Journal of Economic Perspectives, Winter 2008

Concrete's natural color is gray. Its favored uses are utilitarian. Its very ubiquity causes it to blend into the background. But ready-mix concrete does have one remarkable characteristic: other than manufactured ice, perhaps no other manufacturing indus...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Winter 2008

Comments: Robert Solow, Murray Wiedenbaum, V. V. Chari, and Patrick J. Kehoe

Journal of Economic Perspectives, Winter 2008

Notes

Journal of Economic Perspectives, Winter 2008

Evolution and Intelligent Design

By Thomas J. Sargent

American Economic Review, March 2008

Deal or No Deal? Decision Making under Risk in a Large-Payoff Game Show

By Thierry Post, Martijn J. van den Assem, Guido Baltussen, and Richard H. Thaler

American Economic Review, March 2008

We examine the risky choices of contestants in the popular TV game show "Deal or No Deal" and related classroom experiments. Contrary to the traditional view of expected utility theory, the choices can be explained in large part by previous outcomes ex...

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...

Asymmetric Auctions with Resale

By Isa Hafalir and Vijay Krishna

American Economic Review, March 2008

We study first- and second-price auctions with resale in a model with independent private values. With asymmetric bidders, the resulting ineffi ciencies create a motive for post-auction trade which, in our model, takes place via monopoly pricing—...

Optimal Gerrymandering: Sometimes Pack, but Never Crack

By John N. Friedman and Richard T. Holden

American Economic Review, March 2008

Standard intuitions for optimal gerrymandering involve concentrating one's extreme opponents in "unwinnable" districts ("packing") and spreading one's supporters evenly over "winnable" districts ("cracking"). These intuitions come from models with eith...

When Does Coordination Require Centralization?

By Ricardo Alonso, Wouter Dessein, and Niko Matouschek

American Economic Review, March 2008

This paper compares centralized and decentralized coordination when managers are privately informed and communicate strategically. We consider a multidivisional organization in which decisions must be adapted to local conditions but also coordinated wi...

On the Empirical Content of Quantal Response Equilibrium

By Philip A. Haile, Ali Hortaçsu, and Grigory Kosenok

American Economic Review, March 2008

The quantal response equilibrium (QRE) notion of Richard D. McKelvey and Thomas R. Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observed behavior in games played by experiment...

A Dynamic Theory of Public Spending, Taxation, and Debt

By Marco Battaglini and Stephen Coate

American Economic Review, March 2008

This paper presents a political economy theory of fiscal policy. Policy choices are made by a legislature that can raise revenues via an income tax and by borrowing. Revenues can be used to finance a public good, whose value is stochastic, and pork-bar...

Vertical Arrangements, Market Structure, and Competition: An Analysis of Restructured US Electricity Markets

By James B. Bushnell, Erin T. Mansur, and Celeste Saravia

American Economic Review, March 2008

This paper examines vertical arrangements in electricity markets. Vertically integrated wholesalers, or those with long-term contracts, have less incentive to raise wholesale prices when retail prices are determined beforehand. For three restructured m...

Persistence of Power, Elites, and Institutions

By Daron Acemoglu and James A. Robinson

American Economic Review, March 2008

We construct a model to study the implications of changes in political institutions for economic institutions. A change in political institutions alters the distribution of de jure political power, but creates incentives for investments in de facto pol...

Betrayal Aversion: Evidence from Brazil, China, Oman, Switzerland, Turkey, and the United States

By Iris Bohnet, Fiona Greig, Benedikt Herrmann, and Richard Zeckhauser

American Economic Review, March 2008

Due to betrayal aversion, people take risks less willingly when the agent of uncertainty is another person rather than nature. Individuals in six countries (Brazil, China, Oman, Switzerland, Turkey, and the United States) confronted a binary-choice tru...

Female Socialization: How Daughters Affect Their Legislator Fathers' Voting on Women's Issues

By Ebonya L. Washington

American Economic Review, March 2008

Parenting daughters, sociologists have shown, increases feminist sympathies. I test the hypothesis that children, much like neighbors or peers, can influence parental behavior. I demonstrate that conditional on total number of children, each daughter i...

The Mystery of Monogamy

By Eric D. Gould, Omer Moav, and Avi Simhon

American Economic Review, March 2008

We examine why developed societies are monogamous while rich men throughout history have typically practiced polygyny. Wealth inequality naturally produces multiple wives for rich men in a standard model of the marriage market. However, we demonstrate ...

An Equilibrium Model of "Global Imbalances" and Low Interest Rates

By Ricardo J. Caballero, Emmanuel Farhi, and Pierre-Olivier Gourinchas

American Economic Review, March 2008

The sustained rise in US current account deficits, the stubborn decline in long-run real rates, and the rise in US assets in global portfolios appear as anomalies from the perspective of conventional models. This paper rationalizes these facts as an eq...

Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?

By Lucia Foster, John Haltiwanger, and Chad Syverson

American Economic Review, March 2008

We investigate the nature of selection and productivity growth in industries where we observe producer-level quantities and prices separately. We show there are important differences between revenue and physical productivity. Because physical productiv...

On the Evolution of Firm Size Distributions

By Paolo Angelini and Andrea Generale

American Economic Review, March 2008

We study the impact of financial constraints on firm size distribution (FSD). We find that financially constrained firms, identified using various proxies, are smaller than the others (their FSD is more skewed to the right). However, among OECD countries,...