Surprised by the Parimutuel Odds?

By Marco Ottaviani and Peter Norman Sørensen

American Economic Review, December 2009

Empirical analyses of parimutuel betting markets have documented that market probabilities of favorites (longshots) tend to underestimate (overestimate) the corresponding empirical probabilities. We argue that this favorite-longshot bias is consistent wit...

Debt Maturity and the International Financial Architecture

By Olivier Jeanne

American Economic Review, December 2009

This paper presents a theory of the maturity of international sovereign debt, and derives its implications for the reform of the international financial architecture. The analysis is based on a model in which the need to roll over external debt discipline...

Departure Times in Y-Shaped Traffic Networks with Multiple Bottlenecks

By Terry E. Daniel, Eyran J. Gisches, and Amnon Rapoport

American Economic Review, December 2009

We study the departure time decisions of commuters traversing a traffic network with the goal of arriving at a common destination at a specified time. There are costs associated with arriving either too early or too late, and with delays experienced at bo...

Technology, International Trade, and Pollution from US Manufacturing

By Arik Levinson

American Economic Review, December 2009

Pollution emitted by US manufacturers declined markedly over the past several decades, even as real manufacturing output increased. I first show that most of the decline in US manufacturing pollution has resulted from changing production processes ("techn...

Endogenous Verifiability and Relational Contracting

By Ola Kvaløy and Trond E. Olsen

American Economic Review, December 2009

Principal-agent models usually invoke the strong assumption that the parties know for sure ex ante whether a variable is verifiable or not. This paper assumes that only the probability of verification is known, and that this probability is endogenously de...

The Retirement Consumption Puzzle: Evidence from a Regression Discontinuity Approach

By Erich Battistin, Agar Brugiavini, Enrico Rettore, and Guglielmo Weber

American Economic Review, December 2009

We investigate the size of the consumption drop at retirement in Italy by exploiting pension eligibility information to correct for endogenous retirement. We take a regression discontinuity approach and assume that spending would be smooth around pension ...

Direct Democracy and Public Employees

By John G. Matsusaka

American Economic Review, December 2009

In the public sector, employment may be inefficiently high because of patronage, and wages may be inefficiently high because of public employee interest groups. This paper explores whether the initiative process, a direct democracy institution of growing ...

Individual Behavior and Group Membership: Comment

By Matthias Sutter

American Economic Review, December 2009

Charness et al. (2007b) have shown that group membership has a strong effect on individual decisions in strategic games when group membership is salient through payoff commonality. In this comment, I show that their findings also apply to nonstrategic dec...

A Comment on the Economics of Labor Adjustment: Mind the Gap: Evidence from a Monte Carlo Experiment

By Christian Bayer

American Economic Review, December 2009

This comment addresses a point raised in Russell Cooper and Jonathan Willis (2003, 2004), which discusses whether the "gap approach" is appropriate to describe the adjustment of production factors. They show that this approach to labor adjustment as appli...

A Comment on the Economics of Labor Adjustment: Mind the Gap: Evidence from a Monte Carlo Experiment: Reply

By Russell Cooper and Jonathan L. Willis

American Economic Review, December 2009

This note responds to Christian Bayer (2009). Cooper and Willis (2004), hereafter CW, find the aggregate nonlinearities reported in Ricardo Caballero and Eduardo Engel (1993) and Caballero, Engel, and John Haltiwanger (1997) reflect mismeasurement of the ...

Corrigendum: Language, Meaning, and Games: A Model of Communication, Coordination, and Evolution

By Stefano Demichelis and Jörgen W. Weibull

American Economic Review, December 2009

The Wealth of Cities: Agglomeration Economies and Spatial Equilibrium in the United States

By Edward L. Glaeser and Joshua D. Gottlieb

Journal of Economic Literature, December 2009

Empirical research on cities starts with a spatial equilibrium condition: workers and firms are assumed to be indifferent across space. This condition implies that research on cities is different from research on countries, and that work on places withi...

Beyond GDP: The Quest for a Measure of Social Welfare

By Marc Fleurbaey

Journal of Economic Literature, December 2009

This paper critically examines the various approaches to the measurement of individual well-being and social welfare that have been considered for the construction of alternatives to GDP. Special attention is devoted to recent developments in the analys...

Law and Finance "at the Origin"

By Ulrike Malmendier

Journal of Economic Literature, December 2009

What are the key determinants of financial development and growth? A large literature debates the relative importance of countries' legal and political environment. In this paper, I present evidence from ancient Rome, where an early form of shareholder ...

Learning from Schelling's Strategy of Conflict

By Roger B. Myerson

Journal of Economic Literature, December 2009

Thomas Schelling's Strategy of Conflict is a masterpiece that should be recognized as one of the most important and influential books in social theory. This paper reviews some of the important ideas in Strategy of Conflict and consider...

Book Reviews

Journal of Economic Literature, December 2009

Front Matter

Journal of Economic Literature, December 2009

Annotated Listing of New Books

Journal of Economic Literature, December 2009

JEL Classification System

Journal of Economic Literature, December 2009

Doctoral Dissertations in Economics

Journal of Economic Literature, December 2009