A Dynamic Economy with Costly Price Adjustments

By Leif Danziger

American Economic Review, September 1999

This paper studies a general-equilibrium model of a dynamic economy with menu costs. Each firm's productivity is exposed to idiosyncratic and aggregate productivity shocks around a trend, and the money supply to monetary shocks around a trend. All consump...

Measuring Duopoly Power in the British Electricity Spot Market

By Catherine D. Wolfram

American Economic Review, September 1999

This article presents an empirical study of market power in the British electricity industry. Estimates of price-cost markups are derived using direct measures of marginal cost and several approaches that do not rely on cost data. Since two suppliers faci...

An Empirical Examination of Information Barriers to Trade in Insurance

By John Cawley and Tomas Philipson

American Economic Review, September 1999

This paper uses direct evidence to evaluate whether asymmetric information is a barrier to trade in the largest market for private insurance in the world: life insurance. We report several findings that seem difficult to reconcile with the conventional th...

Gaming against Managers in Incentive Systems: Experimental Results with Chinese Students and Chinese Managers

By David J. Cooper, John H. Kagel, Wei Lo, and Qing Liang Gu

American Economic Review, September 1999

We examine strategic interactions between firms and planners in China, comparing behavior between: (i) students and managers with field experience with this situation, (ii) standard versus increased monetary incentives, and (iii) sessions conducted "in co...

The Redesign of the Matching Market for American Physicians: Some Engineering Aspects of Economic Design

By Alvin E. Roth and Elliott Peranson

American Economic Review, September 1999

We report on the design of the new clearinghouse adopted by the National Resident Matching Program, which annually fills approximately 20,000 jobs for new physicians. Because the market has complementarities between applicants and between positions, the t...

Do Workplace Smoking Bans Reduce Smoking?

By William N. Evans, Matthew C. Farrelly, and Edward Montgomery

American Economic Review, September 1999

In recent years workplace smoking policies have become increasingly prevalent and restrictive. Using data from two large-scale national surveys, we investigate whether these policies reduce smoking. Our estimates suggest that workplace bans reduce smoking...

Does Where You Stand Depend on Where You Sit? Tithing Donations and Self-Serving Beliefs

By Gordon B. Dahl and Michael R. Ransom

American Economic Review, September 1999

Economists and psychologists argue that individuals skew personal beliefs to accord with their own interests. To test for the presence of self-serving beliefs, we surveyed 1,200 members of the Mormon Church about tithing. A tithe is a voluntary contributi...

Front Matter

American Economic Review, June 1999

Strategic Behavior in Contests: Reply

By Avinash Dixit

American Economic Review, June 1999

Independent Auditors' Report

American Economic Review, June 1999

Strategic Behavior in Contests: Comment

By Michael R. Baye and Onsong Shin

American Economic Review, June 1999

State Taxes and Interstate Hazardous Waste Shipments

By Arik Levinson

American Economic Review, June 1999

Anomalous Behavior in a Traveler's Dilemma?

By C. Monica Capra, Jacob K. Goeree, Rosario Gomez, and Charles A. Holt

American Economic Review, June 1999

International Stock Market Equilibrium with Heterogenous Tastes

By James A. Bennett and Leslie Young

American Economic Review, June 1999

Unbiased Value Estimates for Environmental Goods: A Cheap Talk Design for the Contingent Valuation Method

By Ronald G. Cummings and Laura O. Taylor

American Economic Review, June 1999

Roads to Prosperity? Assessing the Link between Public Capital and Productivity

By John G. Fernald

American Economic Review, June 1999

Does the positive correlation between infrastructure and productivity reflect causation? If so, in which direction? The author finds that, when growth in roads (the largest component of infrastructure) changes, productivity growth changes disproportionate...

Do Domestic Firms Benefit from Direct Foreign Investment? Evidence from Venezuela

By Brian J. Aitken and Ann E. Harrison

American Economic Review, June 1999

Governments often promote inward foreign investment to encourage technology 'spillovers' from foreign to domestic firms. Using panel data on Venezuelan plants, the authors find that foreign equity participation is positively correlated with plant producti...

Unequal Treatment of Identical Agents in Cournot Equilibrium

By Stephen W. Salant and Greg Shaffer

American Economic Review, June 1999

Oligopoly models where prior actions by firms affect subsequent marginal costs have been useful in illuminating policy debates in areas such as antitrust regulation, environmental protection, and international competition. The authors discuss properties o...

The Market for Evaluations

By Christopher Avery, Paul Resnick, and Richard Zeckhauser

American Economic Review, June 1999

Recent developments in computer networks have driven the cost of distributing information virtually to zero, creating extraordinary opportunities for sharing product evaluations. The authors present pricing and subsidy mechanisms that operate through a co...

What's in a Name? Reputation as a Tradeable Asset

By Steven Tadelis

American Economic Review, June 1999

The author develops a model in which a firm's only asset is its name, which summarizes its reputation, and studies the forces that cause names to be valuable, tradable assets. An adverse selection model in which shifts of ownership are not observable guar...