Experimentation, Patents, and Innovation

By Daron Acemoglu, Kostas Bimpikis, and Asuman Ozdaglar

American Economic Journal: Microeconomics, February 2011

This paper studies a simple model of experimentation and innovation. Our analysis suggests that patents improve the allocation of resources by encouraging rapid experimentation and efficient ex post transfer of knowledge. Each firm receives a signal on th...

Incentives and Innovation: A Multitasking Approach

By Thomas Hellmann and Veikko Thiele

American Economic Journal: Microeconomics, February 2011

This paper develops a multitask model where employees make choices between their assigned standard tasks, for which the firm has a performance measure and provides incentives, and privately observed innovation opportunities that fall outside of the perfo...

Testable Implications of Gross Substitutes in Demand for Two Goods

By Christopher P. Chambers, Federico Echenique, and Eran Shmaya

American Economic Journal: Microeconomics, February 2011

We present a nonparametric "revealed-preference test" for gross substitutes in demand for two goods. (JEL D01, D11)

Running on Empty? Financial Leverage and Product Quality in the Supermarket Industry

By David A. Matsa

American Economic Journal: Microeconomics, February 2011

This paper examines whether debt financing can undermine a supermarket firm's incentive to provide product quality. In the supermarket industry, product availability is an important measure of a retailer's quality. Using US consumer price index microdata...

A Welfare Analysis of Arbitration

By Wojciech Olszewski

American Economic Journal: Microeconomics, February 2011

The paper compares conventional and final-offer arbitration. One party is supposed to make a payment to another party, whose amount depends on a state. Under one scenario, parties obtain signals about the state, which cannot be recognized by the opponents...

Sex Selection and Gender Balance

By V. Bhaskar

American Economic Journal: Microeconomics, February 2011

We model the equilibrium sex ratio when parents can choose the sex of their child. With intrinsic son preference, sex selection results in a male-biased sex ratio. This is inefficient due to a marriage market congestion externality. Medical innovations th...

Ensuring Sales: A Theory of Inter-firm Credit

By Arup Daripa and Jeffrey Nilsen

American Economic Journal: Microeconomics, February 2011

We propose a simple theory to account for the prevalence of interfirm credit at an interest rate of zero. A downstream firm trades off inventory holding costs against lost sales. Lost final sales impose a negative externality on the upstream firm. The sol...

Too Many Products: Decentralized Decision Making in Multinational Firms

By Catherine Thomas

American Economic Journal: Microeconomics, February 2011

I analyze country-level product ranges offered by multinational laundry detergent manufacturers in Western Europe. Observed product range variation across countries exceeds the optimal firm-level response to differences in consumer preferences and retail ...

"Personal Influence": Social Context and Political Competition

By Andrea Galeotti and Andrea Mattozzi

American Economic Journal: Microeconomics, February 2011

This paper studies the effect of social learning on political outcomes in a model of informative campaign advertising. Voters' communication network affects parties' incentives to disclose political information, voters' learning about candidates running ...

Corrigendum: Optimal Provision of Multiple Excludable Public Goods

By Hanming Fang and Peter Norman

American Economic Journal: Microeconomics, February 2011

Front Matter

American Economic Journal: Economic Policy, February 2011

The Cabals of a Few or the Confusion of a Multitude: The Institutional Trade-Off between Representation and Governance

By Leah Brooks, Justin Phillips, and Maxim Sinitsyn

American Economic Journal: Economic Policy, February 2011

Our model illustrates how political institutions trade off between the competing goals of representation and governance, where governance is the responsiveness of an institution to a single pivotal voter. We use exogenous variation from the 30-year histor...

The Effect of Classmate Characteristics on Post-secondary Outcomes: Evidence from the Add Health

By Robert Bifulco, Jason M. Fletcher, and Stephen L. Ross

American Economic Journal: Economic Policy, February 2011

This paper uses a within-school/across-cohort design to present new evidence of the effects of high school classmate characteristics on a wide range of post-secondary outcomes. We find that increases in the percent of classmates with college-educated moth...

Transfer Program Complexity and the Take-Up of Social Benefits

By Henrik Jacobsen Kleven and Wojciech Kopczuk

American Economic Journal: Economic Policy, February 2011

We model complexity in social programs as a by-product of the screening process. While a more rigorous screening process may improve targeting efficiency, the associated complexity is costly to applicants and induces incomplete take-up. We integrate the s...

Calorie Posting in Chain Restaurants

By Bryan Bollinger, Phillip Leslie, and Alan Sorensen

American Economic Journal: Economic Policy, February 2011

We study the impact of mandatory calorie posting on consumers' purchase decisions using detailed data from Starbucks. We find that average calories per transaction fall by 6 percent. The effect is almost entirely related to changes in consumers' food choi...

How Effective Are Public Policies to Increase Health Insurance Coverage among Young Adults?

By Phillip B. Levine, Robin McKnight, and Samantha Heep

American Economic Journal: Economic Policy, February 2011

This paper assesses the impact of policies to increase insurance coverage for young adults. The introduction of SCHIP in 1997 enabled low-income teens up to age 19 to gain access to public health insurance. More recent policies enabled young adults betwe...

Culture, Context, and the Taste for Redistribution

By Erzo F. P. Luttmer and Monica Singhal

American Economic Journal: Economic Policy, February 2011

Is culture an important determinant of preferences for redistribution? To separate culture from the economic and institutional environment ("context"), we relate immigrants' redistributive preferences to the average preference in their birth countries. We...

Payment Choice, Image Motivation and Contributions to Charity: Evidence from a Field Experiment

By Adriaan R. Soetevent

American Economic Journal: Economic Policy, February 2011

This paper examines the impact of payment choice on charitable giving with a door-to-door fund-raising field experiment. Respondents can donate cash only, use debit only, or have both options. Cash donations have lower visibility vis-à-vis solicit...

Front Matter

American Economic Review, February 2011

100 Years of the American Economic Review: The Top 20 Articles

By Kenneth J. Arrow, B. Douglas Bernheim, Martin S. Feldstein, Daniel L. McFadden, James M. Poterba, and Robert M. Solow

American Economic Review, February 2011

This paper presents a list of the top 20 articles published in the American Economic Review during its first 100 years. This list was assembled in honor of the AER's one-hundredth anniversary by a group of distinguished economists at th...