Preferences for Truthfulness: Heterogeneity among and within Individuals

By Rajna Gibson, Carmen Tanner, and Alexander F. Wagner

American Economic Review, February 2013

We conduct an experiment assessing the extent to which people trade off the economic costs of truthfulness against the intrinsic costs of lying. The results allow us to reject a type-based model. People's preferences for truthfulness do not identify them ...

Fairness and Redistribution: Comment

By Rafael Di Tella and Juan Dubra

American Economic Review, February 2013

We provide an example that shows that in the Alesina and Angeletos (2005) model one can obtain multiplicity even if luck plays no role in the economy. Thus, it is not critical that the noise to signal ratio be increasing in taxes, or that desired taxes ar...

Fairness and Redistribution: Reply

By Alberto Alesina, George-Marios Angeletos, and Guido Cozzi

American Economic Review, February 2013

This paper responds to the comment of Di Tella and Dubra (2013). We first clarify that the model of Alesina and Angeletos (2005) admits two distinct types of multiplicity: one that is at the core of their contribution, and a separate one that is at work i...

Front Matter

American Economic Review, February 2013

The Case against Patents

[Symposium: Patents]

By Michele Boldrin and David K. Levine

Journal of Economic Perspectives, Winter 2013

The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correl...

Patents and Innovation: Evidence from Economic History

[Symposium: Patents]

By Petra Moser

Journal of Economic Perspectives, Winter 2013

What is the optimal system of intellectual property rights to encourage innovation? Empirical evidence from economic history can help to inform important policy questions that have been difficult to answer with modern data: For example, does the existence...

The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators

[Symposium: Patents]

By Andrei Hagiu and David B. Yoffie

Journal of Economic Perspectives, Winter 2013

The patent market consists mainly of privately negotiated, bilateral transactions, either sales or cross-licenses, between large companies. There is no eBay, Amazon, New York Stock Exchange, or Kelley's Blue Book equivalent for patents, and when buyers a...

Of Smart Phone Wars and Software Patents

[Symposium: Patents]

By Stuart Graham and Saurabh Vishnubhakat

Journal of Economic Perspectives, Winter 2013

Among the main criticisms currently confronting the US Patent and Trademark Office are concerns about software patents and what role they play in the web of litigation now proceeding in the smart phone industry. We will examine the evidence on the litigat...

Markets for Pollution Allowances: What Are the (New) Lessons?

[Symposium: Trading Pollution Permits]

By Lawrence H. Goulder

Journal of Economic Perspectives, Winter 2013

About 45 years ago a few economists offered the novel idea of trading pollution rights as a way of meeting environmental goals. Such trading was touted as a more cost-effective alternative to traditional forms of regulation, such as specific technology r...

The SO₂ Allowance Trading System: The Ironic History of a Grand Policy Experiment

[Symposium: Trading Pollution Permits]

By Richard Schmalensee and Robert N. Stavins

Journal of Economic Perspectives, Winter 2013

Two decades have passed since the Clean Air Act Amendments of 1990 launched a grand experiment in market-based environmental policy: the SO2 cap-and-trade system. That system performed well but created four striking ironies: First, by creating ...

Carbon Markets 15 Years after Kyoto: Lessons Learned, New Challenges

[Symposium: Trading Pollution Permits]

By Richard G. Newell, William A. Pizer, and Daniel Raimi

Journal of Economic Perspectives, Winter 2013

Carbon markets are substantial and they are expanding. There are many lessons from market experiences over the past eight years: there should be fewer free allowances, better management of market-sensitive information, and a recognition that trading syste...

Moving Pollution Trading from Air to Water: Potential, Problems, and Prognosis

[Symposium: Trading Pollution Permits]

By Karen Fisher-Vanden and Sheila Olmstead

Journal of Economic Perspectives, Winter 2013

This paper seeks to assess the current status of water quality trading and to identify possible problems and solutions. Water pollution permit trading programs have rarely been comprehensively described and analyzed in the peer-reviewed literature. Includ...

Thirty Years of Prospect Theory in Economics: A Review and Assessment

By Nicholas C. Barberis

Journal of Economic Perspectives, Winter 2013

In 1979, Daniel Kahneman and Amos Tversky, published a paper in Econometrica titled "Prospect Theory: An Analysis of Decision under Risk." The paper presented a new model of risk attitudes called "prospect theory," which elegantly captured the e...

The RAND Health Insurance Experiment, Three Decades Later

By Aviva Aron-Dine, Liran Einav, and Amy Finkelstein

Journal of Economic Perspectives, Winter 2013

Between 1974 and 1981, the RAND health insurance experiment provided health insurance to more than 5,800 individuals from about 2,000 households in six different locations across the United States, a sample designed to be representative of families with ...

Recommendations for Further Reading

By Timothy Taylor

Journal of Economic Perspectives, Winter 2013

Notes

Journal of Economic Perspectives, Winter 2013

Front Matter

Journal of Economic Perspectives, Winter 2013

Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications

By Vincent P. Crawford, Miguel A. Costa-Gomes, and Nagore Iriberri

Journal of Economic Literature, March 2013

Most applications of game theory assume equilibrium, justified by presuming either that learning will have converged to one, or that equilibrium approximates people's strategic thinking even when a learning justification is implausible. Yet several recent...

Home Bias in Open Economy Financial Macroeconomics

By Nicolas Coeurdacier and Hélène Rey

Journal of Economic Literature, March 2013

Home bias is a perennial feature of international capital markets. We review various explanations of this puzzling phenomenon highlighting recent developments in macroeconomic modeling that incorporate international portfolio choices in standard twocountr...

On Economics: A Review of Why Nations Fail by D. Acemoglu and J. Robinson and Pillars of Prosperity by T. Besley and T. Persson

By W. Bentley MacLeod

Journal of Economic Literature, March 2013

The purpose of this essay is to review the books Why Nations Fail by Daron Acemoglu and James Robinson, and Pillars of Prosperity by Timothy Besley and Torsten Persson. The essay briefly discusses the main contributions of the books and ...