Women and Affirmative Action

[Symposium: Women in the Labor Market]

By Jonathan S. Leonard

Journal of Economic Perspectives, Winter 1989

This paper reviews evidence indicating that, as it has been enforced so far, affirmative action has contributed negligibly to women's progress in the workplace. Affirmative action can be modeled as a tax on employers whose female employment growth falls b...

Credit Relationships and Business Bankruptcy during the Great Depression

By Mary Eschelbach Hansen and Nicolas L. Ziebarth

American Economic Journal: Macroeconomics, April 2017

Credit relationships are sticky. Stickiness makes relationships beneficial to borrowers in times of their own distress but makes them potentially problematic when lenders themselves face hardship. To examine the role of credit relationships during a finan...

Exclusive Dealing and Entry, when Buyers Compete

By Chiara Fumagalli and Massimo Motta

American Economic Review, June 2006

Rasmusen et al. (1991) and Segal and Whinston (2000) show that an incumbent monopolist might prevent entry of a more efficient competitor by exploiting externalities among buyers. We show that their results hold only when downstream competition among buye...

Intertemporal Consumption and Credit Constraints: Does Total Expenditure Respond to an Exogenous Shock to Credit?

By Søren Leth-Petersen

American Economic Review, June 2010

There is continuing controversy over the importance of credit constraints. This paper investigates whether total household expenditure and debt is affected by an exogenous increase in access to credit provided by a credit market reform that enabled Danish...

Conclusions Regarding Cross-Group Differences in Happiness Depend on Difficulty of Reaching Respondents

By Ori Heffetz and Matthew Rabin

American Economic Review, December 2013

A growing literature explores differences in subjective well-being across demographic groups, often relying on surveys with high nonresponse rates. By using the reported number of call attempts made to participants in the University of Michigan's Surve...

Output and Welfare Effects of Inflation with Costly Price and Quantity Adjustments

By Leif Danziger

American Economic Review, December 2001

The Welfare Effects of Use-or-Lose Provisions in Markets with Dominant Firms

By Ian Gale and Daniel P. O'Brien

American Economic Journal: Microeconomics, February 2013

A use-or-lose provision requires that firms employ a certain minimum fraction of their productive capacity. Variants have been used by regulators in the airline and wireless communications industries, among others. A typical stated objective is to limi...

An Empirical Model of the Medical Match

By Nikhil Agarwal

American Economic Review, July 2015

This paper develops a framework for estimating preferences in a many-to-one matching market using only observed matches. I use pairwise stability and a vertical preference restriction on one side to identify preferences on both sides of the market. Counte...

Heuristic Thinking and Limited Attention in the Car Market

By Nicola Lacetera, Devin G. Pope, and Justin R. Sydnor

American Economic Review, August 2012

Can heuristic information processing affect important product markets? Analyzing over 22 million wholesale used-car transactions, we find evidence of left-digit bias in the processing of odometer values, whereby individuals focus on the number's leftmost ...

Inefficiency in Legislative Policymaking: A Dynamic Analysis

By Marco Battaglini and Stephen Coate

American Economic Review, March 2007

This paper develops an infinite horizon model of public spending and taxation in which policy decisions are determined by legislative bargaining. The policy space incorporates both productive and distributive public spending and distortionary taxation....

(Good and Bad) Reputation for a Servant of Two Masters

By Heski Bar-Isaac and Joyee Deb

American Economic Journal: Microeconomics, November 2014

We present a model in which an agent takes actions to affect her reputation with two audiences with diverse preferences. This contrasts with standard reputation models that consider a homogeneous audience. A new aspect that arises is that different audie...

Optimal Executive Compensation versus Managerial Power: A Review of Lucian Bebchuk and Jesse Fried's Pay without Performance: The Unfulfilled Promise of Executive Compensation

By Michael S. Weisbach

Journal of Economic Literature, June 2007

This essay reviews Lucian A. Bebchuk and Jesse M. Fried's Pay without Performance: The Unfulfilled Promise of Executive Compensation. Bebchuk and Fried criticize the standard view of executive compensation, in which executives negotiate contracts w...

Contracting with Third Parties

By Sandeep Baliga and Tomas Sjöström

American Economic Journal: Microeconomics, February 2009

In bilateral holdup and moral hazard in teams models, introducing a third party allows implementation of the first best, even if renegotiation is possible. Fines paid to the third party provide incentives for truth-telling and investment. This result h...

The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?

[Symposium: Automation and Labor Markets]

By Joel Mokyr, Chris Vickers, and Nicolas L. Ziebarth

Journal of Economic Perspectives, Summer 2015

Technology is widely considered the main source of economic progress, but it has also generated cultural anxiety throughout history. The developed world is now suffering from another bout of such angst. Anxieties over technology can take on several fo...

Correspondence: The Source of Animal Spirits

By D. E. Moggridge

Journal of Economic Perspectives, Summer 1992

Correspondence and response regarding: The Source of Animal Spirits

Regulating Asset Price Risk

By Philippe Bacchetta, Cédric Tille, and Eric van Wincoop

American Economic Review, May 2011

There has been a long debate about whether speculators are stabilizing or not. We consider a model where speculators have a stabilizing role in normal times, but may also provoke large risk panics. The very feature that makes arbitrageurs liquidity provid...

Dynamic Deception

By Axel Anderson and Lones Smith

American Economic Review, December 2013

We characterize the unique equilibrium of a competitive continuous time game between a resource-constrained informed player and a sequence of rivals who partially observe his action intensity. Our game adds noisy monitoring and impatient players to Aum...

Information Asymmetries in Consumer Credit Markets: Evidence from Payday Lending

By Will Dobbie and Paige Marta Skiba

American Economic Journal: Applied Economics, October 2013

Information asymmetries are prominent in theory but difficult to estimate. This paper exploits discontinuities in loan eligibility to test for moral hazard and adverse selection in the payday loan market. Regression discontinuity and regression kink ap...

A Review Essay on Alvin Roth's Who Gets What—And Why

By Edward L. Glaeser

Journal of Economic Literature, December 2017

Alvin Roth's Who Gets What—And Why provides a richly accessible introduction to his pioneering work on market design. Much of economics ignores the institutions that allocate goods, blithely assuming that the mythical Walrasian auctioneer wil...

Taxes and Employment Subsidies in Optimal Redistribution Programs

By Paul Beaudry, Charles Blackorby, and Dezsö Szalay

American Economic Review, March 2009

This paper explores how to optimally set taxes and transfers when taxation authorities are uninformed about individuals' value of time in both market and nonmarket activities; and can observe both market-income and time allocated to market employment. ...