Front Matter

American Economic Journal: Microeconomics, August 2009

On the Potential of Neuroeconomics: A Critical (but Hopeful) Appraisal

By B. Douglas Bernheim

American Economic Journal: Microeconomics, August 2009

This paper attempts to identify and articulate the specific ways in which the emerging field of neuroeconomics might shed light on traditional positive and normative questions in economics, as well as the likely limitations of its potential contributio...

A Comment on Bernheim's Appraisal of Neuroeconomics

By Faruk Gul and Wolfgang Pesendorfer

American Economic Journal: Microeconomics, August 2009

This paper comments on "On the Potential of Neuroeconomics: A Critical (but Hopeful) Appraisal" by B. Douglas Beinheim (JEL D01, D87)

Is There a Method of Neuroeconomics?

By Aldo Rustichini

American Economic Journal: Microeconomics, August 2009

This note tries to state, precisely, the method of neuroecomics, and is based on the discussion in B. Douglas Bernheim's (2009) appraisal. We claim that the theory formulates hypotheses modeling the choice process as an algorithmic procedure. The hypot...

Neuroeconomics: A Comment on Bernheim

By Joel Sobel

American Economic Journal: Microeconomics, August 2009

This paper comments on "On the Potential of Neuroeconomics: A Critical (but Hopeful) Appraisal" by B. Douglas Bernheim. (JEL D01, D87)

Sniping and Squatting in Auction Markets

By Jeffrey C. Ely and Tanjim Hossain

American Economic Journal: Microeconomics, August 2009

We conducted a field experiment to test the benefit from late bidding (sniping) in online auction markets. We compared sniping to early bidding (squatting) in auctions for newly-released DVDs on eBay. Sniping led to a statistically significant increase...

Assignment Messages and Exchanges

By Paul Milgrom

American Economic Journal: Microeconomics, August 2009

"Assignment messages" are maximally general messages to describe substitutable preferences by means of a linear program. With "integer assignment messages," there exist integer-valued Walrasian allocations, extending a result of Lloyd S. Shapley and Ma...

Trading in Networks: A Normal Form Game Experiment

By Douglas M. Gale and Shachar Kariv

American Economic Journal: Microeconomics, August 2009

This paper reports an experimental study of trading networks. Networks are incomplete in the sense that each trader can only exchange assets with a limited number of other traders. The greater the incompleteness of the network, the more intermediation ...

Incentive Reversal

By Eyal Winter

American Economic Journal: Microeconomics, August 2009

By incentive reversal we refer to situations in which an increase in rewards for all agents results in fewer agents exerting effort. We show that externalities among peers may give rise to such intriguing situations even when all agents are fully ratio...

A "Dual Self" Representation for Stochastic Temptation

By Kalyan Chatterjee and R. Vijay Krishna

American Economic Journal: Microeconomics, August 2009

We consider the following two-period problem of self-control. In the first period, an individual has to decide on the set of feasible choices from which she will select one in the second period. In the second period, the individual might choose an alte...

Dynamic Revenue Maximization with Heterogeneous Objects: A Mechanism Design Approach

By Alex Gershkov and Benny Moldovanu

American Economic Journal: Microeconomics, August 2009

We study the revenue-maximizing allocation of several heterogeneous, commonly ranked objects to impatient agents with privately known characteristics who arrive sequentially. There is a deadline after which no more objects can be allocated. We first ch...

Market Culture: How Rules Governing Exploding Offers Affect Market Performance

By Muriel Niederle and Alvin E. Roth

American Economic Journal: Microeconomics, August 2009

Many markets encounter difficulty maintaining a thick marketplace because they experience transactions made at dispersed times. To address such problems, many markets try to establish norms concerning when offers can be made, accepted, and rejected. Ex...

Corruptible Advice

By Erik Durbin and Ganesh Iyer

American Economic Journal: Microeconomics, August 2009

We study information transmission to a decision maker from an advisor who values a reputation for incorruptibility in the presence of a third party who offers unobservable payments/bribes. While it is common to ascribe negative effects to such bribes, ...

Front Matter

American Economic Journal: Economic Policy, August 2009

Crowded Colleges and College Crowd-Out: The Impact of Public Subsidies on the Two-Year College Market

By Stephanie Riegg Cellini

American Economic Journal: Economic Policy, August 2009

This study assesses the impact of an increase in funding for public community colleges on the market for two-year college education, considering both the effect on community college enrollments and on the number of proprietary schools in a market. I dr...

Is the Taxable Income Elasticity Sufficient to Calculate Deadweight Loss? The Implications of Evasion and Avoidance

By Raj Chetty

American Economic Journal: Economic Policy, August 2009

Martin Feldstein's (1999) widely used taxable income formula for deadweight loss assumes the marginal social cost of evasion and avoidance equals the tax rate. This condition is likely to be violated in practice for two reasons. First, some of the cost...

Tax Sensitivity and Home State Preferences in Internet Purchasing

By Glenn Ellison and Sara Fisher Ellison

American Economic Journal: Economic Policy, August 2009

Data on memory modules sales are used to explore aspects of e-retail demand. Aggregate sales are examined in state-level regressions. Discrete choice techniques are used to examine (incomplete) hourly sales data from a price comparison site. We find a ...

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...

How Do Gasoline Prices Affect Fleet Fuel Economy?

By Shanjun Li, Christopher Timmins, and Roger H. von Haefen

American Economic Journal: Economic Policy, August 2009

Exploiting a rich dataset of passenger vehicle registrations in 20 US MSAs from 1997 to 2005, we examine the effects of gasoline prices on the automotive fleet's composition. We find that high gasoline prices affect fleet fuel economy through two chann...

The Divergence of Legal Procedures

By Aron Balas, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer

American Economic Journal: Economic Policy, August 2009

Simeon Djankov et al. (2003) introduce a measure of the quality of contract enforcement -- the formalism of civil procedure -- for 109 countries as of 2000. For 40 of these countries, we compute procedural formalism every year since 1950. We find that ...