Inflation and Price Adjustments: Micro Evidence from Norwegian Consumer Prices 1975-2004

By Fredrik Wulfsberg

American Economic Journal: Macroeconomics, July 2016

This is the first paper documenting the frequency and size of price adjustments using micro data from both the high-inflation period in the 1970s and 1980s, and the period of low inflation since the early 1990s. When inflation is high and volatile, prices...

Population Size Effects in the Structural Development of England

By Oksana M. Leukhina and Stephen J. Turnovsky

American Economic Journal: Macroeconomics, July 2016

The English structural transformation from farming to manufacturing was accompanied by rapid technological change, expansion of trade, and massive population growth. While the roles of technology and trade in this process have been investigated, the liter...

Sovereign Default Risk and Uncertainty Premia

By Demian Pouzo and Ignacio Presno

American Economic Journal: Macroeconomics, July 2016

This paper studies how international investors' concerns about model misspecification affect sovereign bond spreads. We develop a general equilibrium model of sovereign debt with endogenous default wherein investors fear that the probability model of the ...

Front Matter

American Economic Journal: Microeconomics, August 2016

Inducing Leaders to Take Risky Decisions: Dismissal, Tenure, and Term Limits

By Philippe Aghion and Matthew O. Jackson

American Economic Journal: Microeconomics, August 2016

How can a principal (employer or voter) induce an agent (worker or politician) to choose the "right" actions if risky actions reveal the agent's decision making competence and only dismissal can be used as an incentive instrument? We first show that if th...

Naked Exclusion and the Volatility of Innovation

By Christodoulos Stefanadis

American Economic Journal: Microeconomics, August 2016

The analysis shows that the volatility of a potential entrant's innovation is an important parameter that shapes an incumbent supplier's exclusivity strategy. Higher volatility encourages the incumbent supplier to adopt an accommodation strategy rather th...

Comparative Risk Aversion in the Presence of Ambiguity

By Marie-Charlotte Guetlein

American Economic Journal: Microeconomics, August 2016

his paper suggests a characterization of increases in risk aversion within the smooth ambiguity model by Klibanoff, Marinacci, and Mukerji (2005). I show that an increase in risk aversion is qualitatively different from that under expected utility, due to...

Screening for Good Patent Pools through Price Caps on Individual Licenses

By Aleksandra Boutin

American Economic Journal: Microeconomics, August 2016

Patent pools reduce prices when selling complementary inputs to technologies, but can also effectively cartelize markets when involving substitutes. Independent licensing, by reintroducing competition, ensures that only good pools form when there are two ...

Keeping Secrets: The Economics of Access Deterrence

By Emeric Henry and Francisco Ruiz-Aliseda

American Economic Journal: Microeconomics, August 2016

Keeping valuable secrets requires costly protection efforts. Breaking them requires costly search efforts. In a dynamic model in which the value of the secret decreases with the number of those holding it, we examine the secret holders' protection decisio...

Strategic Information Acquisition and Transmission

By Rossella Argenziano, Sergei Severinov, and Francesco Squintani

American Economic Journal: Microeconomics, August 2016

This paper explores the implications of costly information acquisition in a strategic communication setting. We show that equilibrium decisions based on a biased expert's advice may be more precise than when information is directly acquired by the decisio...

Search Advertising

By Alexandre de Cornière

American Economic Journal: Microeconomics, August 2016

Search engines enable advertisers to target consumers based on the query they have entered. In a framework in which consumers search sequentially after having entered a query, I show that such targeting reduces search costs, improves matches and intensifi...

Either or Both Competition: A "Two-Sided" Theory of Advertising with Overlapping Viewerships

By Attila Ambrus, Emilio Calvano, and Markus Reisinger

American Economic Journal: Microeconomics, August 2016

In media markets, consumers spread their attention to several outlets, increasingly so as consumption migrates online. The traditional framework for competition among media outlets rules out this behavior by assumption. We propose a new model that allows ...

Just Enough or All: Selling a Firm

By Mehmet Ekmekci, Nenad Kos, and Rakesh Vohra

American Economic Journal: Microeconomics, August 2016

We consider the problem of selling a firm to a single buyer. The buyer privately knows post-sale cash flows and the benefits of control. Unlike the case where buyer's private information is one-dimensional, the optimal mechanism is a menu of tuples of cas...

Bailouts and the Preservation of Competition: The Case of the Federal Timber Contract Payment Modification Act

By James W. Roberts and Andrew Sweeting

American Economic Journal: Microeconomics, August 2016

We estimate the value of competition in United States Forest Service (USFS) timber auctions, in the context of the Reagan administration's bailout of firms that faced substantial losses on existing contracts. We use a model with endogenous entry by asymme...

The Utilitarian Relevance of the Aggregation Theorem

By Marc Fleurbaey and Philippe Mongin

American Economic Journal: Microeconomics, August 2016

Harsanyi (1955) invested his Aggregation Theorem and Impartial Observer Theorem with utilitarian sense, but Sen (1986) described them as "representation theorems" with little ethical import. This critical view has never been subjected to full analytical s...

Front Matter

American Economic Journal: Economic Policy, August 2016

Property Taxation, Zoning, and Efficiency in a Dynamic Tiebout Model

By Levon Barseghyan and Stephen Coate

American Economic Journal: Economic Policy, August 2016

This paper presents a dynamic Tiebout model and uses it to revisit a classic argument in public finance. The argument, due to Hamilton (1975), is that a system of governments financing services with property taxes will produce an efficient allocation of h...

Health Insurance Mandates, Mammography, and Breast Cancer Diagnoses

By Marianne P. Bitler and Christopher S. Carpenter

American Economic Journal: Economic Policy, August 2016

We examine the effects of state health insurance mandates requiring coverage of screening mammograms. We find evidence that mammography mandates significantly increased mammography screenings by 4.5-25 percent. Effects are larger for women with less than ...

From Today's City to Tomorrow's City: An Empirical Investigation of Urban Land Assembly

By Leah Brooks and Byron Lutz

American Economic Journal: Economic Policy, August 2016

Because cities are constrained by the boundaries of land ownership, fundamental urban modifications require land delineation changes. We evaluate whether there is enough land assembly--the joining together of two or more parcels of land--to put land to it...

Adaptation to Climate Change: Evidence from US Agriculture

By Marshall Burke and Kyle Emerick

American Economic Journal: Economic Policy, August 2016

Understanding the potential impacts of climate change on economic outcomes requires knowing how agents might adapt to a changing climate. We exploit large variation in recent temperature and precipitation trends to identify adaptation to climate change in...