Stationary Concepts for Experimental 2 X 2 Games: Comment

By Christoph Brunner, Colin F. Camerer, and Jacob K. Goeree

American Economic Review, April 2011

Reinhard Selten and Thorsten Chmura (2008) recently reported laboratory results for completely mixed 2 X 2 games used to compare Nash equilibrium with four other stationary concepts: quantal response equilibrium, action-sampling equilibrium, payoff-sampli...

Stationary Concepts for Experimental 2 X 2 Games: Reply

By Reinhard Selten, Thorsten Chmura, and Sebastian J. Goerg

American Economic Review, April 2011

This is a reply to "Stationary Concepts for Experimental 2 X 2 Games: Comment" by Brunner, Camerer, and Goeree which corrects some computational errors in Selten and Chmura (2008) and extends the comparison of five stationary concepts to data from previou...

Front Matter

American Economic Journal: Microeconomics, May 2011

Bankruptcy, Finance Constraints, and the Value of the Firm

By Douglas Gale and Piero Gottardi

American Economic Journal: Microeconomics, May 2011

We study a competitive model in which market incompleteness implies that debt-financed firms may default in some states of nature, and default may lead to the sale of the firms' assets at fire sale prices when a finance constraint is binding. The anticipa...

A Theory of Outsourcing and Wage Decline

By Thomas J. Holmes and Julia Thornton Snider

American Economic Journal: Microeconomics, May 2011

This paper develops a theory of outsourcing in which the circumstances under which factors of production can grab rents play the leading role. One factor has monopoly power (call this labor) while a second factor does not (call this capital). There are t...

Zeros, Quality, and Space: Trade Theory and Trade Evidence

By Richard Baldwin and James Harrigan

American Economic Journal: Microeconomics, May 2011

Bilateral, product-level data exhibit a number of strong patterns that can be used to evaluate international trade theories, notably the spatial incidence of "export zeros" (correlated with distance and importer size), and of export unit values (positivel...

The Principal-Agent Approach to Testing Experts

By Wojciech Olszewski and Marcin Pęski

American Economic Journal: Microeconomics, May 2011

Recent literature on testing experts shows that it is often impossible to determine whether an expert knows the stochastic process that generates data. Despite this negative result, we show that there often exist contracts that allow a decision maker to a...

The Good News-Bad News Effect: Asymmetric Processing of Objective Information about Yourself

By David Eil and Justin M. Rao

American Economic Journal: Microeconomics, May 2011

We study processing and acquisition of objective information regarding qualities that people care about, intelligence and beauty. Subjects receiving negative feedback did not respect the strength of these signals, were far less predictable in their updati...

Taboos and Identity: Considering the Unthinkable

By Chaim Fershtman, Uri Gneezy, and Moshe Hoffman

American Economic Journal: Microeconomics, May 2011

A taboo is an "unthinkable" action. Even the thought of violating a taboo triggers a punishment. We consider a model in which taboos are part of the definition of one's identity. Deliberating over breaking the taboo changes the individual's choice set, an...

The Economics of Contingent Re-auctions

By Sandro Brusco, Giuseppe Lopomo, and Leslie M. Marx

American Economic Journal: Microeconomics, May 2011

We consider an auction environment where an object can be sold with usage restrictions that generate benefits to the seller but decrease buyers' valuations. In this environment, sellers such as the FCC have used "contingent re-auctions," offering the rest...

Exclusive Contracts, Innovation, and Welfare

By Yongmin Chen and David E. M. Sappington

American Economic Journal: Microeconomics, May 2011

We extend Philippe Aghion and Patrick Bolton's (1987) classic model to analyze the equilibrium incidence and impact of exclusive contracts in a setting where research and development (R&D) drives industry performance. An exclusive contract between an incu...

The Effect of Market Structure on Cellular Technology Adoption and Pricing

By Katja Seim and V. Brian Viard

American Economic Journal: Microeconomics, May 2011

We examine how structural changes in the mobile telecommunications industry between 1996, when local markets were duopolies, and 1998, when varying degrees of regulated entry had occurred, affected firms' product offerings and nonlinear pricing strategie...

Corrigendum: Sex Selection and Gender Balance

By V. Bhaskar

American Economic Journal: Microeconomics, May 2011

Front Matter

American Economic Journal: Economic Policy, May 2011

Gender-Based Taxation and the Division of Family Chores

By Alberto Alesina, Andrea Ichino, and Loukas Karabarbounis

American Economic Journal: Economic Policy, May 2011

Gender-based taxation (GBT ) satisfies Ramsey's rule because it taxes at a lower rate the more elastic labor supply of women. We study GBT in a model in which labor elasticities emerge endogenously from intrahousehold bargaining. We explore the cases of ...

Manipulation of Social Program Eligibility

By Adriana Camacho and Emily Conover

American Economic Journal: Economic Policy, May 2011

We document how manipulation of a targeting system for social welfare programs evolves over time. First, there was strategic behavior of some local politicians in the timing of the household interviews around local elections. Then, there was corrupt beha...

Identifying the Aggregate Productivity Effects of Entry and Size Restrictions: An Empirical Analysis of License Reform in India

By A. V. Chari

American Economic Journal: Economic Policy, May 2011

Distortions in the allocation of resources between heterogeneous producers have the potential to generate large reductions in aggregate productivity, a point that has been stressed by recent studies. There is, however, little direct empirical evidence f...

No Child Left Behind: Subsidized Child Care and Children's Long-Run Outcomes

By Tarjei Havnes and Magne Mogstad

American Economic Journal: Economic Policy, May 2011

Many developed countries are currently considering a move toward subsidized, widely accessible child care or preschool. However, studies on how large-scale provision of child care affects child development are scarce, and focused on short-run outcomes. We...

The End of Court-Ordered Desegregation

By Byron Lutz

American Economic Journal: Economic Policy, May 2011

In response to three Supreme Court rulings in the early 1990s, numerous court-ordered desegregation plans have been terminated. Using a unique dataset and an event study research design, this paper explores the impact of these terminations. The results s...

Immigration and the Neighborhood

By Albert Saiz and Susan Wachter

American Economic Journal: Economic Policy, May 2011

Within metropolitan areas, neighborhoods of growing immigrant settlement are becoming relatively less desirable to natives. We deploy a geographic diffusion model to instrument for the growth of immigrant density in a neighborhood. Our approach deals ex...