Dynamic Information Design under Constrained Communication Rules

By Caio Lorecchio and Daniel Monte

American Economic Journal: Microeconomics, February 2023

An information designer wishes to persuade agents to invest in a project of unknown quality. To do so, she must induce investment and collect feedback from these investments. Motivated by data regulations and simplicity concerns, our designer faces commun...

Moral Hazard and Efficiency in a Frictional Market

By Guillaume Roger and Benoît Julien

American Economic Journal: Microeconomics, February 2023

Principals seek to trade with homogeneous agents by posting incentive contracts, which direct their search. Search and moral hazard interact in equilibrium. If using transfers to compensate agents failing to contract, the equilibrium allocation is always ...

An Information Theory of Efficient Differential Treatment

By Emil Temnyalov

American Economic Journal: Microeconomics, February 2023

When are differential treatment policies—such as preferential treatment, affirmative action, and gender equity policies—justified by efficiency concerns? I propose a nonparametric assignment model where a policymaker assigns agents to different treatm...

Debunking Rumors in Networks

By Luca P. Merlino, Paolo Pin, and Nicole Tabasso

American Economic Journal: Microeconomics, February 2023

We study the diffusion of a true and a false message (the rumor) in a social network. Upon hearing a message, individuals may believe it, disbelieve it, or debunk it through costly verification. Whenever the truth survives in steady state, so does the rum...

A Theory of Stability in Matching with Incomplete Information

By Yi-Chun Chen and Gaoji Hu

American Economic Journal: Microeconomics, February 2023

We provide a framework for studying two-sided matching markets with incomplete information. The framework accommodates two-sided incomplete information as well as heterogeneous information among the agents. We propose a notion called stability for a marke...

Contest Design with Stochastic Performance

By René Kirkegaard

American Economic Journal: Microeconomics, February 2023

This paper studies optimal contest design in contests with noisy performance. Here, contest design is a team moral hazard problem that endogenizes the assignment rule that maps performance profiles into winning probabilities. The optimal design features e...

Implications of Unequal Discounting in Dynamic Contracting

By Ilia Krasikov, Rohit Lamba, and Thomas Mettral

American Economic Journal: Microeconomics, February 2023

This paper studies a canonical dynamic screening problem where the agent has Markovian private information and limited commitment and the principal and the agent have different discount factors. Unequal discounting captures unequal access to capital marke...

Misbehavior in Common Value Auctions: Bidding Rings and Shills

By Dan Levin and James Peck

American Economic Journal: Microeconomics, February 2023

We characterize the optimal misbehavior by bidding rings or an auctioneer in the ascending English auction with common values. We also show, in an extended game, that in equilibrium potential members join and truthfully reveal their signals. Under a separ...

Togetherness in the Household

By Sam Cosaert, Alexandros Theloudis, and Bertrand Verheyden

American Economic Journal: Microeconomics, February 2023

Spending time with a spouse is a major gain from marriage. We extend the classical collective model of the household to allow for togetherness between spouses. Togetherness takes the form of joint leisure and joint care for children. Using revealed prefer...

Kevin Roshak on technology and education

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Do online homework solutions lower student test scores?

Maya Mikdash on holding police officers accountable

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Do internal affairs investigations improve police officers' behavior?

Pablo Troncoso on pension reform in Chile

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How much did workers adjust their labor supply after Chile's 2008 pension reform?

Asiya Validova on inequality and COVID-19 mortality

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How much excess death during the first year of the pandemic was driven by income inequality?

CSWEP 2023 Carolyn Shaw Bell Award Speech

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Front Matter

American Economic Journal: Economic Policy, February 2023

The Employment Effects of Countercyclical Public Investments

By Lukas Buchheim and Martin Watzinger

American Economic Journal: Economic Policy, February 2023

This paper estimates the causal impact of a sizable German public investment program on employment at the county level. The program focused on improving the energy efficiency of school buildings, making it possible to use the number of schools as an instr...

Health Effects of Increasing Income for the Elderly: Evidence from a Chilean Pension Program

By Enrico Miglino, Nicolás Navarrete H., Gonzalo Navarrete H., and Pablo Navarrete H.

American Economic Journal: Economic Policy, February 2023

We estimate the effect of a permanent income increase on the health outcomes of the elderly poor. Our regression discontinuity design exploits an eligibility cutoff in a Chilean basic pension program that grants monthly payments to retirees without a cont...

Housing in Medicaid: Should It Really Change?

By Bertrand Achou

American Economic Journal: Economic Policy, February 2023

Housing is mostly exempted from Medicaid and Supplemental Social Insurance means tests. Reforms of this special treatment have been debated, but little is known about its costs, benefits, and redistributive implications. I estimate a life cycle model of s...

Exploring Residual Profit Allocation

By Sebastian Beer, Ruud de Mooij, Shafik Hebous, Michael Keen, and Li Liu

American Economic Journal: Economic Policy, February 2023

Residual profit allocation (RPA) schemes have come to prominence in discussions of international tax reform but with almost nothing known about their economic impact. These schemes tax multinationals by allocating their "routine" profits to source countri...

The Extension of Credit with Nonexclusive Contracts and Sequential Banking Externalities

By Giacomo De Giorgi, Andres Drenik, and Enrique Seira

American Economic Journal: Economic Policy, February 2023

Nonexclusive sequential borrowing can increase default and impose externalities on prior lenders. We document that sequential banking is pervasive with substantial effects. Using credit card applications from a large bank and data on the applicants' entir...