Development from Representation? A Study of Quotas for the Scheduled Castes in India

By Francesca Refsum Jensenius

American Economic Journal: Applied Economics, July 2015

This paper estimates the constituency-level development effects of quotas for the Scheduled Castes (SCs) in India, using a unique dataset of development indicators for more than 3,100 state assembly constituencies in 15 Indian states in 1971 and 2001. Mat...

The Effect of Product Demand on Inequality: Evidence from the United States and the United Kingdom

By Marco Leonardi

American Economic Journal: Applied Economics, July 2015

Using Consumer Expenditure Survey data this paper shows that more educated workers demand more high-skill-intensive services and, to a lesser extent, more very low-skill-intensive services (such as personal services). Additional evidence at the Metropolit...

Front Matter

American Economic Journal: Applied Economics, July 2015

Front Matter

American Economic Review, July 2015

An Empirical Model of the Medical Match

By Nikhil Agarwal

American Economic Review, July 2015

This paper develops a framework for estimating preferences in a many-to-one matching market using only observed matches. I use pairwise stability and a vertical preference restriction on one side to identify preferences on both sides of the market. Counte...

Financial Entanglement: A Theory of Incomplete Integration, Leverage, Crashes, and Contagion

By Nicolae Gârleanu, Stavros Panageas, and Jianfeng Yu

American Economic Review, July 2015

We propose a unified model of limited market integration, asset-price determination, leveraging, and contagion. Investors and firms are located on a circle, and access to markets involves participation costs that increase with distance. Due to a complemen...

Banking, Liquidity, and Bank Runs in an Infinite Horizon Economy

By Mark Gertler and Nobuhiro Kiyotaki

American Economic Review, July 2015

We develop an infinite horizon macroeconomic model of banking that allows for liquidity mismatch and bank runs. Whether a bank run equilibrium exists depends on bank balance sheets and an endogenous liquidation price for bank assets. While in normal times...

Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials

By Eric Budish, Benjamin N. Roin, and Heidi Williams

American Economic Review, July 2015

We investigate whether private research investments are distorted away from long-term projects. Our theoretical model highlights two potential sources of this distortion: short-termism and the fixed patent term. Our empirical context is cancer research, w...

Acquisitions, Productivity, and Profitability: Evidence from the Japanese Cotton Spinning Industry

By Serguey Braguinsky, Atsushi Ohyama, Tetsuji Okazaki, and Chad Syverson

American Economic Review, July 2015

We explore how changes in ownership affect the productivity and profitability of producers. Using detailed data from the Japanese cotton spinning industry at the turn of the last century, we find that acquired firms' production facilities were not on aver...

Team Contests with Multiple Pairwise Battles

By Qiang Fu, Jingfeng Lu, and Yue Pan

American Economic Review, July 2015

We consider a multi-battle team contest in which players from two rival teams form pairwise matches to fight in distinct component battles, which are carried out sequentially or (partially) simultaneously. A team wins if and only if its players win a majo...

Vertical Contracting with Informational Opportunism

By Vianney Dequiedt and David Martimort

American Economic Review, July 2015

We consider vertical contracting arrangements between a manufacturer and a retailing network when retailers have private information and the organization is run through bilateral contracts. We highlight a new form of informational opportunism arising when...

Revealed Preference, Rational Inattention, and Costly Information Acquisition

By Andrew Caplin and Mark Dean

American Economic Review, July 2015

Apparently mistaken decisions are ubiquitous. To what extent does this reflect irrationality, as opposed to a rational trade-off between the costs of information acquisition and the expected benefits of learning? We develop a revealed preference test that...

Estimating a War of Attrition: The Case of the US Movie Theater Industry

By Yuya Takahashi

American Economic Review, July 2015

This paper empirically studies firm's strategic exit decisions in an environment where demand is declining. Specifically, I quantify the extent to which the exit process generated by firms' strategic interactions deviates from the outcome that maximizes i...

Risk Preferences Are Not Time Preferences: On the Elicitation of Time Preference under Conditions of Risk: Comment

By Stephen L. Cheung

American Economic Review, July 2015

Andreoni and Sprenger (2012a, b) report evidence that distinct utility functions govern choices under certainty and risk. I investigate the robustness of this result to the experimental design. I find that the effect disappears completely when a multiple ...

Risk Preferences Are Not Time Preferences: Balancing on a Budget Line: Comment

By Thomas Epper and Helga Fehr-Duda

American Economic Review, July 2015

In a recent experimental study of intertemporal risky decision making, Andreoni and Sprenger (2012) find that subjects exhibit a preference for intertemporal diversification, which is inconsistent with discounted expected utility theory. It was claimed th...

Risk Preferences Are Not Time Preferences: Separating Risk and Time Preference: Comment

By Bin Miao and Songfa Zhong

American Economic Review, July 2015

Andreoni and Sprenger (2012a,b) observe that utility functions are distinct for risk and time preferences, and show that their findings are consistent with a preference for certainty. We revisit this question in an enriched experimental setting in whic...

Risk Preferences Are Not Time Preferences: Reply

By James Andreoni and Charles Sprenger

American Economic Review, July 2015

Can the well-known experimental phenomenon of present-bias in intertemporal choice be confounded with the risks associated with receiving payment? Can measurements of risk preferences be used to represent desires for smoothness in intertemporal payments? ...

Aggregate Implications of a Credit Crunch: The Importance of Heterogeneity

By Francisco J. Buera and Benjamin Moll

American Economic Journal: Macroeconomics, July 2015

We take an off-the-shelf model with financial frictions and heterogeneity, and study the mapping from a credit crunch, modeled as a shock to collateral constraints, to simple aggregate wedges. We study three variants of this model that only differ in the ...

Elasticity Optimism

By Jean Imbs and Isabelle Mejean

American Economic Journal: Macroeconomics, July 2015

On average, estimates of trade elasticities are smaller in aggregate data than at sector level. This is an artifact of aggregation. Estimations performed on aggregate data constrain sector elasticities to homogeneity, which creates a heterogeneity bias. T...

Offshoring and Directed Technical Change

By Daron Acemoglu, Gino Gancia, and Fabrizio Zilibotti

American Economic Journal: Macroeconomics, July 2015

We study the implications of offshoring on innovation, technology, and wage inequality in a Ricardian model with directed technical change. Profit maximization determines both the extent of offshoring and the direction of technological progress. A fall in...