Deadly incentives

[Page]

In Colombia, stronger incentives for the military to kill rebels backfired.

Front Matter

American Economic Journal: Microeconomics, November 2020

Optimal Collateralized Contracts

By Dan Cao and Roger Lagunoff

American Economic Journal: Microeconomics, November 2020

We examine the role of collateral in a dynamic model of optimal credit contracts in which a borrower values both housing and nonhousing consumption. The borrower's private information about his income is the only friction. An optimal contract is collatera...

Information Transmission under the Shadow of the Future: An Experiment

By Alistair J. Wilson and Emanuel Vespa

American Economic Journal: Microeconomics, November 2020

We experimentally examine how information transmission functions in an ongoing relationship. Where the one-shot cheap-talk literature documents substantial overcommunication and preferences for honesty, the outcomes in our repeated setting are more consis...

Testable Implications of Models of Intertemporal Choice: Exponential Discounting and Its Generalizations

By Federico Echenique, Taisuke Imai, and Kota Saito

American Economic Journal: Microeconomics, November 2020

We present revealed-preference characterizations of the most common models of intertemporal choice: the model of exponentially discounted concave utility, and some of its generalizations. Our characterizations take consumption data as primitives, and prov...

The Importance of Commitment Power in Games with Imperfect Evidence

By Francisco Silva

American Economic Journal: Microeconomics, November 2020

The literature initiated by Green and Laffont (1986) studies principal-agent models with hard evidence. Evidence is modeled by assuming that the message set of the agent is type dependent. In this setup, Glazer and Rubinstein (2004, 2006) and Sher (2011) ...

Hybrid All-Pay and Winner-Pay Contests

By Johan N. M. Lagerlöf

American Economic Journal: Microeconomics, November 2020

In many contests in economic and political life, both all-pay and winner-pay expenditures matter for winning. This paper studies such hybrid contests under symmetry and asymmetry. The symmetric model assumes very little structure but yields a simple close...

Informational Cycles in Search Markets

By Eeva Mauring

American Economic Journal: Microeconomics, November 2020

I show that market participants' equilibrium beliefs can create fluctuations in the volume of trading, even in a stationary environment. I study a sequential search model where buyers face an unknown distribution of offers. Each buyer learns about the dis...

Codiffusion of Technologies in Social Networks

By Natalia Lazzati

American Economic Journal: Microeconomics, November 2020

This paper studies the diffusion process of two complementary technologies among people who are connected through a social network. It characterizes adoption rates over time for different initial allocations and network structures. In doing so, we provide...

The Value of Incumbency When Platforms Face Heterogeneous Customers

By Gary Biglaiser and Jacques Crémer

American Economic Journal: Microeconomics, November 2020

We study competition for the market in a dynamic model with network externalities, focusing on the efficiency of market outcomes. We propose a representation of the strategic advantages of incumbency and embed it in a dynamic framework with heterogeneous ...

Front Matter

American Economic Review, November 2020

From Extreme to Mainstream: The Erosion of Social Norms

By Leonardo Bursztyn, Georgy Egorov, and Stefano Fiorin

American Economic Review, November 2020

Social norms, usually persistent, can change quickly when new public information arrives, such as a surprising election outcome. People may become more inclined to express views or take actions previously perceived as stigmatized and may judge others less...

How Well Targeted Are Soda Taxes?

By Pierre Dubois, Rachel Griffith, and Martin O'Connell

American Economic Review, November 2020

Soda taxes aim to reduce excessive sugar consumption. We assess who is most impacted by soda taxes. We estimate demand using micro longitudinal data covering on-the-go purchases, and exploit the panel dimension to estimate individual-specific preferences....

Seasonal Liquidity, Rural Labor Markets, and Agricultural Production

By Günther Fink, B. Kelsey Jack, and Felix Masiye

American Economic Review, November 2020

Rural economies in many developing countries are characterized by a lean season in the months preceding harvest, when farmers have depleted their cash and grain savings from the previous year. To identify the impacts of liquidity during the lean season, w...

Does When You Die Depend on Where You Live? Evidence from Hurricane Katrina

By Tatyana Deryugina and David Molitor

American Economic Review, November 2020

We follow Medicare cohorts to estimate Hurricane Katrina's long-run mortality effects on victims initially living in New Orleans. Including the initial shock, the hurricane improved eight-year survival by 2.07 percentage points. Migration to lower-mortali...

Gambling over Public Opinion

By Deepal Basak and Joyee Deb

American Economic Review, November 2020

We consider bargaining environments in which public opinion provides leverage by making compromises costly. Two parties make initial demands, before knowing the public opinion. If deadlocked, they can bargain again after public opinion forms, but suffer r...

Small and Large Firms over the Business Cycle

By Nicolas Crouzet and Neil R. Mehrotra

American Economic Review, November 2020

This paper uses new confidential Census data to revisit the relationship between firm size, cyclicality, and financial frictions. First, we find that large firms (the top 1 percent by size) are less cyclically sensitive than the rest. Second, high and ris...

Does Information Break the Political Resource Curse? Experimental Evidence from Mozambique

By Alex Armand, Alexander Coutts, Pedro C. Vicente, and Inês Vilela

American Economic Review, November 2020

Natural resources can have a negative impact on the economy through corruption and civil conflict. This paper tests whether information can counteract this political resource curse. We implement a large-scale field experiment following the dissemination o...

Importing polarization

[Research Highlight]

October 26, 2020

Professor Gordon Hanson discusses how competition from China has pushed some communities to the edges of the political spectrum.