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Evaluating Behavioral Incentive Compatibility: Insights from Experiments

[Symposium: Behavioral Incentive Compatibility]

By David Danz, Lise Vesterlund, and Alistair J. Wilson

Journal of Economic Perspectives, Fall 2024

Incentive compatibility is core to mechanism design. The success of auctions, matching algorithms, and voting systems all hinge on the ability to select incentives that make it in the individual's interest to reveal their type. But how do we test whether ...

Behavioral Incentive Compatibility and Empirically Informed Welfare Analysis: An Introductory Guide

[Symposium: Behavioral Incentive Compatibility]

By Alex Rees-Jones

Journal of Economic Perspectives, Fall 2024

A growing body of research conducts welfare analysis that assumes behavioral incentive compatibility—that is, that behavior is governed by pursuit of incentives conditional on modeled imperfections in decision-making. In this article, I present several ...

Designing Simple Mechanisms

[Symposium: Behavioral Incentive Compatibility]

By Shengwu Li

Journal of Economic Perspectives, Fall 2024

It matters whether real-world mechanisms are simple. If participants cannot see that a mechanism is incentive-compatible, they may refuse to participate or may behave in ways that undermine the mechanism. There are several ways to formalize what it means ...

The Political Economy of Industrial Policy

[Symposium: Industrial Policy]

By Réka Juhász and Nathan Lane

Journal of Economic Perspectives, Fall 2024

We examine the ways in which political realities shape industrial policy through the lens of modern political economy. We consider two broad "governance constraints": (1) the political forces that shape how industrial policy is chosen and (2) the ways in ...

Industrial Policy: Lessons from Shipbuilding

[Symposium: Industrial Policy]

By Panle Jia Barwick, Myrto Kalouptsidi, and Nahim Bin Zahur

Journal of Economic Perspectives, Fall 2024

Industrial policy has been used throughout history in some form or other by most countries. Yet, it remains one of the most contentious issues among policy makers and economists alike. In part, this is because the empirical evidence on whether and how it ...

Semiconductors and Modern Industrial Policy

[Symposium: Industrial Policy]

By Chad P. Bown and Dan Wang

Journal of Economic Perspectives, Fall 2024

Semiconductors have emerged as a headline in the resurgence of modern industrial policy. This paper explores the political economic history of the sector, the changing nature of the semiconductor supply chain, and the new sources of concern that have moti...

Labor Market Effects of Workweek Restrictions: Evidence from the Great Depression

By Price Fishback, Chris Vickers, and Nicolas L. Ziebarth

American Economic Journal: Macroeconomics, October 2024

We study the effects of restrictions on the length of the workweek under the President's Reemployment Agreement (PRA) of July 1933 and the National Industrial Recovery Act. We construct a model in which the equilibrium without such a workweek restriction ...