Strategic Ignorance in Sequential Procurement

By Silvana Krasteva and Huseyin Yildirim

American Economic Journal: Microeconomics, May 2019

Should a buyer approach sellers of complementary goods informed or uninformed of her private valuations, and if informed, in which sequence? In this paper, we show that an informed buyer would start with the high-value seller to minimize future holdup. In...

Behavioral Economics and the Atheoretical Style

By Ran Spiegler

American Economic Journal: Microeconomics, May 2019

Behavioral economics is widely perceived to be part of the profession's shift away from a culture that places abstract theory at its center. I present a critical discussion of the atheoretical style with which "behavioral" themes are often disseminated: a...

Partners or Strangers? Cooperation, Monetary Trade, and the Choice of Scale of Interaction

By Maria Bigoni, Gabriele Camera, and Marco Casari

American Economic Journal: Microeconomics, May 2019

We show that monetary exchange facilitates the transition from small to large-scale economic interactions. In an experiment, subjects chose to play an "intertemporal cooperation game" either in partnerships or in groups of strangers where payoffs could be...

Policies in Relational Contracts

By Daniel Barron and Michael Powell

American Economic Journal: Microeconomics, May 2019

We consider how a firm's policies constrain its relational contracts. A policy is a sequence of decisions made by a principal; each decision determines how agents' efforts affect their outputs. We consider surplus-maximizing policies in a flexible dynamic...

Cream Skimming and Information Design in Matching Markets

By Gleb Romanyuk and Alex Smolin

American Economic Journal: Microeconomics, May 2019

Short-lived buyers arrive to a platform over time and randomly match with sellers. The sellers stay at the platform and decide whether to accept incoming requests. The platform designs what buyer information the sellers observe before deciding to form a m...

Who Benefits from Information Disclosure? The Case of Retail Gasoline

By Fernando Luco

American Economic Journal: Microeconomics, May 2019

How does online price disclosure affect competition when both consumers and firms can use the disclosed information? This paper addresses this question exploiting the sequential implementation of an online price-disclosure policy in the Chilean retail gas...

Front Matter

American Economic Journal: Economic Policy, May 2019

Geographic Cross-Sectional Fiscal Spending Multipliers: What Have We Learned?

By Gabriel Chodorow-Reich

American Economic Journal: Economic Policy, May 2019

A geographic cross-sectional fiscal spending multiplier measures the effect of an increase in spending in one region of a monetary union. Empirical studies of such multipliers have proliferated. I review this research and what the evidence implies for nat...

Early School Exposure, Test Scores, and Noncognitive Outcomes

By Thomas Cornelissen and Christian Dustmann

American Economic Journal: Economic Policy, May 2019

We estimate the effects of receiving additional schooling before age five on cognitive and noncognitive outcomes, exploiting unique school entry rules in England that cause variation in the age at school entry and the effective length of the first school ...

Screening in Contract Design: Evidence from the ACA Health Insurance Exchanges

By Michael Geruso, Timothy Layton, and Daniel Prinz

American Economic Journal: Economic Policy, May 2019

We study insurers' use of prescription drug formularies to screen consumers in the ACA Health Insurance exchanges. We begin by showing that exchange risk adjustment and reinsurance succeed in neutralizing selection incentives for most, but not all, consum...

Student Loan Nudges: Experimental Evidence on Borrowing and Educational Attainment

By Benjamin M. Marx and Lesley J. Turner

American Economic Journal: Economic Policy, May 2019

We provide the first experimental evidence on the effect of student loans on educational attainment. Loan amounts listed in financial aid award letters ("offers") do not alter students' choice sets but significantly affect borrowing. Students randomly rec...

Correcting for Misreporting of Government Benefits

By Nikolas Mittag

American Economic Journal: Economic Policy, May 2019

Data linkage studies often document, but do not remedy, severe survey errors. To improve survey estimates despite restricted linked data access, this paper develops a convenient and general estimation method that combines public use data with conditional ...

Are Home Buyers Inattentive? Evidence from Capitalization of Energy Costs

By Erica Myers

American Economic Journal: Economic Policy, May 2019

This paper explores whether home buyers are attentive to energy costs. The cost-effectiveness of market-based pollution policies crucially depends on whether consumers are attentive to energy costs when purchasing energy-using durables. I exploit energy-c...

Are Local Tax Rates Strategic Complements or Strategic Substitutes?

By Raphaël Parchet

American Economic Journal: Economic Policy, May 2019

The identification of strategic interactions among local governments is typically plagued by endogeneity problems. I exploit the fact that local jurisdictions located close to a state border have some neighbors in another state and instrument the tax rate...

Good Cop, Bad Cop: Using Civilian Allegations to Predict Police Misconduct

By Kyle Rozema and Max Schanzenbach

American Economic Journal: Economic Policy, May 2019

In response to high-profile cases of police misconduct, reformers are calling for greater use of civilian allegations in identifying potential problem officers. This paper applies an Empirical Bayes framework to data on civilian allegations and civil righ...

Financial Incentives and Earnings of Disability Insurance Recipients: Evidence from a Notch Design

By Philippe Ruh and Stefan Staubli

American Economic Journal: Economic Policy, May 2019

Most countries reduce disability insurance (DI ) benefits for beneficiaries earning above a specified threshold. Such an earnings threshold generates a discontinuous increase in tax liability—a notch—and creates an incentive to keep earnings below the...

Snapping Back: Food Stamp Bans and Criminal Recidivism

By Cody Tuttle

American Economic Journal: Economic Policy, May 2019

I estimate the effect of access to food stamps on criminal recidivism. In 1996, a federal welfare reform imposed a lifetime ban from food stamps on convicted drug felons. Florida modified this ban, restricting it to drug traffickers who commit their offen...

Front Matter

American Economic Review, May 2019

Wealth Distribution and Social Mobility in the US: A Quantitative Approach

By Jess Benhabib, Alberto Bisin, and Mi Luo

American Economic Review, May 2019

We quantitatively identify the factors that drive wealth dynamics in the United States and are consistent with its skewed cross-sectional distribution and with social mobility. We concentrate on three critical factors: (i) skewed earnings, (ii) differenti...

What Drives Differences in Management Practices?

By Nicholas Bloom, Erik Brynjolfsson, Lucia Foster, Ron Jarmin, Megha Patnaik, Itay Saporta-Eksten, and John Van Reenen

American Economic Review, May 2019

Partnering with the US Census Bureau, we implement a new survey of "structured" management practices in two waves of 35,000 manufacturing plants in 2010 and 2015. We find an enormous dispersion of management practices across plants, with 40 percent of thi...