Pricing Network Effects: Competition

By Itay P. Fainmesser and Andrea Galeotti

American Economic Journal: Microeconomics, August 2020

We study the practice of influencer marketing in oligopoly markets and its effect on market efficiency. In our model, each consumer is influenced by choices of a subset of other consumers. Firms gather information on consumers' influence and price discrim...

Image versus Information: Changing Societal Norms and Optimal Privacy

By S. Nageeb Ali and Roland Bénabou

American Economic Journal: Microeconomics, August 2020

We analyze the costs and benefits of using social image to foster desirable behaviors. Each agent acts based on his intrinsic motivation, private assessment of the public good, and reputational concern for appearing prosocial. A Principal sets the general...

Revealed Preference Analysis with Normal Goods: Application to Cost-of-Living Indices

By Laurens Cherchye, Thomas Demuynck, Bram De Rock, and Khushboo Surana

American Economic Journal: Microeconomics, August 2020

We present a revealed preference methodology for nonparametric demand analysis under the assumption of normal goods. Our methodology is flexible in that it allows for imposing normality on any subset of goods. We show the usefulness of our methodology for...

Voting and Contributing When the Group Is Watching

By Emeric Henry and Charles Louis-Sidois

American Economic Journal: Microeconomics, August 2020

Members of groups and organizations often have to decide on rules that regulate their contributions to common tasks. They typically differ in their propensity to contribute and often care about the image they project; in particular, they want to be percei...

Matching in Networks with Bilateral Contracts: Corrigendum

By John William Hatfield, Ravi Jagadeesan, and Scott Duke Kominers

American Economic Journal: Microeconomics, August 2020

Hatfield and Kominers (2012) introduced a model of matching in networks with bilateral contracts and showed that stable outcomes exist in supply chains when firms' preferences over contracts are fully substitutable. Hatfield and Kominers (2012) also asser...

Land Reform and Productivity: A Quantitative Analysis with Micro Data

By Tasso Adamopoulos and Diego Restuccia

American Economic Journal: Macroeconomics, July 2020

We assess the effects of a major land policy change on farm size and agricultural productivity using a quantitative model and micro-level data. We study the 1988 land reform in the Philippines that imposed a ceiling on land holdings, redistributed above...

Balancing land reform and productivity

[Research Highlight]

July 24, 2020

The Philippines redistributed over 6 million hectares of land. But it came with some unintended costs.

Front Matter

American Economic Review, August 2020

Multidimensional Skills, Sorting, and Human Capital Accumulation

By Jeremy Lise and Fabien Postel-Vinay

American Economic Review, August 2020

We construct a structural model of on-the-job search in which workers differ in skills along several dimensions and sort themselves into jobs with heterogeneous skill requirements along those same dimensions. Skills are accumulated when used, and deprecia...

A Behavioral New Keynesian Model

By Xavier Gabaix

American Economic Review, August 2020

This paper analyzes how bounded rationality affects monetary and fiscal policy via an empirically relevant enrichment of the New Keynesian model. It models agents' partial myopia toward distant atypical events using a new microfounded "cognitive discounti...

Using Aggregated Relational Data to Feasibly Identify Network Structure without Network Data

By Emily Breza, Arun G. Chandrasekhar, Tyler H. McCormick, and Mengjie Pan

American Economic Review, August 2020

Social network data are often prohibitively expensive to collect, limiting empirical network research. We propose an inexpensive and feasible strategy for network elicitation using Aggregated Relational Data (ARD): responses to questions of the form "how ...

Long-Run Growth of Financial Data Technology

By Maryam Farboodi and Laura Veldkamp

American Economic Review, August 2020

"Big data" financial technology raises concerns about market inefficiency. A common concern is that the technology might induce traders to extract others' information, rather than to produce information themselves. We allow agents to choose how much they ...

Cities in Bad Shape: Urban Geometry in India

By Mariaflavia Harari

American Economic Review, August 2020

The spatial layout of cities is an important feature of urban form, highlighted by urban planners but overlooked by economists. This paper investigates the causal economic implications of city shape in India. I measure cities' geometric properties over ti...

Financial Crises, Dollarization, and Lending of Last Resort in Open Economies

By Luigi Bocola and Guido Lorenzoni

American Economic Review, August 2020

Foreign currency debt is considered a source of financial instability in emerging markets. We propose a theory in which liability dollarization arises from an insurance motive of domestic savers. Since financial crises are associated to depreciations, sav...

Escalation of Scrutiny: The Gains from Dynamic Enforcement of Environmental Regulations

By Wesley Blundell, Gautam Gowrisankaran, and Ashley Langer

American Economic Review, August 2020

The US Environmental Protection Agency (EPA) uses a dynamic approach to enforcing air pollution regulations, with repeat offenders subject to high fines and designation as high priority violators (HPV). We estimate the value of dynamic enforcement by deve...

Bartik Instruments: What, When, Why, and How

By Paul Goldsmith-Pinkham, Isaac Sorkin, and Henry Swift

American Economic Review, August 2020

The Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the typical use of a Bartik instrument assumes a pooled exposure research design, where the shares measure differential exposure to commo...

Stability and Bayesian Consistency in Two-Sided Markets

By Qingmin Liu

American Economic Review, August 2020

We propose a criterion of stability for two-sided markets with asymmetric information. A central idea is to formulate off-path beliefs conditional on counterfactual pairwise deviations and on-path beliefs in the absence of such deviations. A matching-be...

Subsidy Policies and Insurance Demand

By Jing Cai, Alain de Janvry, and Elisabeth Sadoulet

American Economic Review, August 2020

Using data from a two-year pricing experiment, we study the impact of subsidy policies on weather insurance take-up. Results show that subsidies increase future insurance take-up through their influence on payout experiences. Exploring mechanisms of the p...

Representation matters

[Page]

How much can role models help to diversify the economics profession?

Front Matter

American Economic Journal: Economic Policy, August 2020