Inventory Management, Product Quality, and Cross-Country Income Differences

By Bernardo S. Blum, Sebastian Claro, Kunal Dasgupta, and Ignatius J. Horstmann

American Economic Journal: Macroeconomics, January 2019

Previous research has documented that export shipments are "lumpy"—exporters make infrequent and relatively large shipments to any given export destination. This fact has been interpreted as implying that fixed, per shipment cost and inventory man...

Employment Adjustment and Part-Time Work: Lessons from the United States and the United Kingdom

By Daniel Borowczyk-Martins and Etienne Lalé

American Economic Journal: Macroeconomics, January 2019

We document that fluctuations in part-time employment play a major role in movements in hours per worker during cyclical swings in the labor market. Building on this result, we develop a stock-flow framework to describe the dynamics of part-time employmen...

Front Matter

American Economic Journal: Microeconomics, February 2019

The Impact of Monitoring in Infinitely Repeated Games: Perfect, Public, and Private

By Masaki Aoyagi, V. Bhaskar, and Guillaume R. Fréchette

American Economic Journal: Microeconomics, February 2019

This paper uses a laboratory experiment to study the effect of the monitoring structure on the play of the infinitely repeated prisoner's dilemma. Keeping the strategic form of the stage game fixed, we examine the behavior of subjects when information abo...

The Risk of Failure: Trial and Error Learning and Long-Run Performance

By Steven Callander and Niko Matouschek

American Economic Journal: Microeconomics, February 2019

Innovation is often the key to sustained progress, yet innovation itself is difficult and highly risky. Success is not guaranteed as breakthroughs are mixed with setbacks and the path of learning is typically far from smooth. How decision makers learn by ...

Impressionable Voters

By Costel Andonie and Daniel Diermeier

American Economic Journal: Microeconomics, February 2019

We propose a model of impressionable voters. Impressionable voters vote based on impressions rather than maximizing expected utility. We apply our model to elections with multiple candidates and solve for the stationary distributions of the implied stocha...

Make and Buy: Outsourcing, Vertical Integration, and Cost Reduction

By Simon Loertscher and Michael H. Riordan

American Economic Journal: Microeconomics, February 2019

Globalization reshaped supply chains and the boundaries of firms in favor of outsourcing. Now, even vertically integrated firms procure substantially from external suppliers. To study procurement and the structure of firms in this reshaped economy, we ana...

Zone Pricing in Retail Oligopoly

By Brian Adams and Kevin R. Williams

American Economic Journal: Microeconomics, February 2019

We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel...

Competition in Treasury Auctions

By Helmut Elsinger, Philipp Schmidt-Dengler, and Christine Zulehner

American Economic Journal: Microeconomics, February 2019

We investigate the role of competition on the outcome of Austrian Treasury auctions. Austria's EU accession led to an increase in the number of banks participating in treasury auctions. We use structural estimates of bidders' private values to examine t...

Randomizing Endowments: An Experimental Study of Rational Expectations and Reference-Dependent Preferences

By Annette Cerulli-Harms, Lorenz Goette, and Charles Sprenger

American Economic Journal: Microeconomics, February 2019

We test expectations-based reference dependence in market experiments with probabilistic forced exchange. Koszegi and Rabin (2006) predict that when the probability of forced exchange increases, individuals cannot expect to stick with the status quo, an...

Market Share Contracts, Exclusive Dealing, and the Integer Problem

By Zhijun Chen and Greg Shaffer

American Economic Journal: Microeconomics, February 2019

This paper compares exclusive dealing and market share contracts in a model of naked exclusion. We discuss how the contracts work and identify a fundamental trade-off that arises: market share contracts are better at maximizing a seller's benefit from f...

Collective Choice in Dynamic Public Good Provision

By T. Renee Bowen, George Georgiadis, and Nicolas S. Lambert

American Economic Journal: Microeconomics, February 2019

Two heterogeneous agents contribute over time to a joint project and collectively decide its scale. A larger scale requires greater cumulative effort and delivers higher benefits upon completion. We show that the efficient agent prefers a smaller scale,...

The Evolution of Cooperation: The Role of Costly Strategy Adjustments

By Julian Romero and Yaroslav Rosokha

American Economic Journal: Microeconomics, February 2019

We study the evolution of cooperation in the indefinitely repeated prisoner's dilemma when it is costly for players to adjust their strategy. Our experimental interface allows subjects to design a comprehensive strategy that then selects actions for the...

Front Matter

American Economic Review, February 2019

When Britain Turned Inward: The Impact of Interwar British Protection

By Alan de Bromhead, Alan Fernihough, Markus Lampe, and Kevin Hjortshøj O'Rourke

American Economic Review, February 2019

International trade collapsed, and also became much less multilateral, during the 1930s. Previous studies, looking at aggregate trade flows, have argued that trade policies had relatively little to do with either phenomenon. Using a new dataset incorporat...

The Taxing Deed of Globalization

By Peter H. Egger, Sergey Nigai, and Nora M. Strecker

American Economic Review, February 2019

This paper examines the effects of globalization on the distribution of worker-specific labor taxes using a unique set of tax calculators. We find a differential effect of higher trade and factor mobility on relative tax burdens in 1980–1993 versus 1994...

Drilling Like There's No Tomorrow: Bankruptcy, Insurance, and Environmental Risk

By Judson Boomhower

American Economic Review, February 2019

This paper measures the effects of bankruptcy protection on industry structure and environmental outcomes in oil and gas extraction. Using administrative data from Texas, I exploit variation in an insurance requirement that reduced firms' ability to avoid...

Recovery from the Great Depression: The Farm Channel in Spring 1933

By Joshua K. Hausman, Paul W. Rhode, and Johannes F. Wieland

American Economic Review, February 2019

From March to July 1933, US industrial production rose 57 percent. We show that an important source of recovery was the effect of dollar devaluation on farm prices, incomes, and consumption. Devaluation immediately raised traded crop prices, and auto sale...

Equilibrium Provider Networks: Bargaining and Exclusion in Health Care Markets

By Kate Ho and Robin S. Lee

American Economic Review, February 2019

We evaluate the consequences of narrow hospital networks in commercial health care markets. We develop a bargaining solution, "Nash-in-Nash with Threat of Replacement," that captures insurers' incentives to exclude, and combine it with California data and...

Demand and Supply of Infrequent Payments as a Commitment Device: Evidence from Kenya

By Lorenzo Casaburi and Rocco Macchiavello

American Economic Review, February 2019

Despite extensive evidence that preferences are often time-inconsistent, there is only scarce evidence of willingness to pay for commitment. Infrequent payments for frequently provided goods and services are a common feature of many markets and they may n...