Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Comment

By Shuhei Takahashi

American Economic Review, April 2014

Chang and Kim (2007) develop an incomplete asset markets model incorporating discrete labor supply and idiosyncratic labor productivity. Their results resolve long-standing puzzles for business cycle models. Specifically, they produce a low correlation...

Heterogeneity and Aggregation: Implications for Labor-Market Fluctuations: Reply

By Yongsung Chang and Sun-Bin Kim

American Economic Review, April 2014

Takahashi (2014) has uncovered coding errors in our paper, Chang and Kim (2007)-henceforth, CK. We acknowledge and are embarrassed by these mistakes. We are grateful to Takahashi for uncovering them. While the correction decreases the volatility of the...

Front Matter

American Economic Review, April 2014

Neural Activity Reveals Preferences without Choices

By Alec Smith, B. Douglas Bernheim, Colin F. Camerer, and Antonio Rangel

American Economic Journal: Microeconomics, May 2014

We investigate the feasibility of inferring the choices people would make (if given the opportunity) based on their neural responses to the pertinent prospects when they are not engaged in actual decision making. The ability to make such inferences is ...

Information Acquisition in a War of Attrition

By Kyungmin Kim and Frances Zhiyun Xu Lee

American Economic Journal: Microeconomics, May 2014

We consider a war of attrition where the players can learn about a state that determines their payoffs at stochastic deadline. We study how the incentives to acquire information depend on the (un)verifiability of information and its implications for ef...

Inefficiency Measurement

By Christopher P. Chambers and Alan D. Miller

American Economic Journal: Microeconomics, May 2014

We introduce an ordinal model of efficiency measurement. Our primitive is a notion of efficiency that is comparative, but not cardinal or absolute. In this framework, we postulate axioms that an ordinal efficiency measure should satisfy. Primary among t...

Vendettas

By Friedel Bolle, Jonathan H. W. Tan, and Daniel John Zizzo

American Economic Journal: Microeconomics, May 2014

Vendettas occur in many real-world settings where rivals compete for a prize, e.g., winning a competitive promotion or retaining a job, by engaging in aggressive, retaliatory behavior. We present a benchmark experiment where two players have an initial ...

When Is a Risky Asset "Urgently Needed"?

By Felix Kubler, Larry Selden, and Xiao Wei

American Economic Journal: Microeconomics, May 2014

Risk free asset demand in the classic portfolio problem is shown to decrease with income if and only if the consumer's uncertainty preferences over assets satisfy the preference condition that the risk free asset is more readily substituted for the ris...

Delay and Deadlines: Freeriding and Information Revelation in Partnerships

By Arthur Campbell, Florian Ederer, and Johannes Spinnewijn

American Economic Journal: Microeconomics, May 2014

We study two sources of delay in teams: freeriding and lack of communication. Partners contribute to the value of a common project, but have private information about the success of their own efforts. When the deadline is far away, unsuccessful partners...

Candidates, Character, and Corruption

By B. Douglas Bernheim and Navin Kartik

American Economic Journal: Microeconomics, May 2014

We study the characteristics of self-selected candidates in corrupt political systems. Individuals differ along two dimensions of unobservable character: public spirit (altruism) and honesty (disutility from selling out to special interests). Both aspe...

Communication, Renegotiation, and the Scope for Collusion

By David J. Cooper and Kai-Uwe Kühn

American Economic Journal: Microeconomics, May 2014

We study the effect of communication in an experimental game where cooperation is consistent with equilibrium play if players share an understanding that cheating will be punished. Consistent with communication acting as a coordinating device, credible...

Front Matter

American Economic Journal: Microeconomics, May 2014

The Differential Effects of Bilateral Tax Treaties

By Bruce A. Blonigen, Lindsay Oldenski, and Nicholas Sly

American Economic Journal: Economic Policy, May 2014

Bilateral tax treaties (BTTs) are intended to promote foreign direct investment through double-taxation relief. Using BEA firm-level data, we find a positive effect of BTTs on FDI, which is larger for firms that use differentiated inputs. BTTs allow mu...

The Elasticity of Corporate Taxable Income: New Evidence from UK Tax Records

By Michael P. Devereux, Li Liu, and Simon Loretz

American Economic Journal: Economic Policy, May 2014

We estimate the elasticity of corporate taxable income with respect to the statutory corporation tax rate using the population of UK corporation tax returns. We analyze bunching in the distribution of taxable income at kinks in the marginal rate schedu...

Corporate Taxes and Internal Borrowing within Multinational Firms

By Peter Egger, Christian Keuschnigg, Valeria Merlo, and Georg Wamser

American Economic Journal: Economic Policy, May 2014

This study develops a theoretical model of a multinational firm with an internal capital market. Hypotheses regarding the role of local versus foreign characteristics such as profit tax rates, lack of institutional quality, financial underdevelopment, ...

International Taxation and Cross-Border Banking

By Harry Huizinga, Johannes Voget, and Wolf Wagner

American Economic Journal: Economic Policy, May 2014

This paper examines empirically how international taxation affects the volume and pricing of cross-border banking activities for a sample of banks in 38 countries over the 1998�2008 period. International double taxation of foreign-source bank inco...

Entrepreneurial Taxation with Endogenous Entry

By Florian Scheuer

American Economic Journal: Economic Policy, May 2014

I analyze the optimal taxation of profits and labor income under endogenous firm formation. Individuals differ in their skill and cost of setting up a firm, and can become workers or entrepreneurs. A tax system in which profits and labor income are sub...

Health and the Political Agency of Women

By Sonia Bhalotra and Irma Clots-Figueras

American Economic Journal: Economic Policy, May 2014

We investigate whether women's political representation in state legislatures improves public provision of antenatal and childhood health services in the districts from which they are elected, arguing that the costs of poor services in this domain fall...

Beaches, Sunshine, and Public Sector Pay: Theory and Evidence on Amenities and Rent Extraction by Government Workers

By Jan K. Brueckner and David Neumark

American Economic Journal: Economic Policy, May 2014

Rent extraction by public sector workers may be limited by the ability of taxpayers to vote with their feet. But rent extraction may be higher in regions where high amenities mute the migration response. This paper develops a theoretical model that pre...

Life and Death in the Fast Lane: Police Enforcement and Traffic Fatalities

By Gregory DeAngelo and Benjamin Hansen

American Economic Journal: Economic Policy, May 2014

Simultaneity complicates the estimation of the causal effect of police on crime. We overcome this obstacle by focusing on a mass layoff of Oregon State Police in February of 2003. Due solely to budget cuts, 35 percent of the roadway troopers were laid ...