Trade-Induced Structural Change and the Skill Premium

By Javier Cravino and Sebastian Sotelo

American Economic Journal: Macroeconomics, July 2019

We study how international trade affects manufacturing employment and the relative wage of unskilled workers when goods and services are traded with different intensities. Manufacturing trade reduces manufacturing prices worldwide, which reduces manufactu...

The Intensity of Job Search and Search Duration

By R. Jason Faberman and Marianna Kudlyak

American Economic Journal: Macroeconomics, July 2019

We use online job application data to study the relationship between search intensity and search duration. The data allow us to control for job seeker composition and the evolution of available job openings over the duration of search. We find that, withi...

Front Matter

American Economic Journal: Microeconomics, August 2019

Dominance and Competitive Bundling

By Sjaak Hurkens, Doh-Shin Jeon, and Domenico Menicucci

American Economic Journal: Microeconomics, August 2019

We study how bundling affects competition between two asymmetric multi-product firms. One firm dominates the other in that it produces better products more efficiently. For low (high) levels of dominance, bundling intensifies (relaxes) price competition a...

An Experimental Comparison of Risky and Riskless Choice—Limitations of Prospect Theory and Expected Utility Theory

By Hui-Kuan Chung, Paul Glimcher, and Agnieszka Tymula

American Economic Journal: Microeconomics, August 2019

Prospect theory, used descriptively for decisions under both risk and certainty, presumes concave utility over gains and convex utility over losses, a pattern widely seen in lottery tasks. Although such discontinuous gain-loss reference-dependence is also...

Relative Price Dispersion: Evidence and Theory

By Greg Kaplan, Guido Menzio, Leena Rudanko, and Nicholas Trachter

American Economic Journal: Microeconomics, August 2019

Relative price dispersion refers to persistent differences in the price that different retailers set for one particular good relative to the price they set for other goods. Relative price dispersion accounts for 30 percent of the overall variance of price...

Laboratories of Democracy: Policy Experimentation under Decentralization

By Chen Cheng and Christopher Li

American Economic Journal: Microeconomics, August 2019

We develop a model of policy experimentation in which the policy decisions of local and national politicians are driven by career concerns. When politicians' payoffs are convex in their reputation and policymaking is opaque, local politicians experiment b...

Two-Sided Matching with (Almost) One-Sided Preferences

By Guillaume Haeringer and Vincent Iehlé

American Economic Journal: Microeconomics, August 2019

In a two-sided matching context we show how we can predict stable matchings by considering only one side's preferences and the mutually acceptable pairs of agents. Our methodology consists of identifying impossible matches, i.e., pairs of agents that can ...

Cadet-Branch Matching in a Kelso-Crawford Economy

By Ravi Jagadeesan

American Economic Journal: Microeconomics, August 2019

Sonmez (2013) and Sonmez and Switzer (2013) used matching theory with unilaterally substitutable priorities to propose mechanisms to match cadets to military branches. This paper shows that, alternatively, the Sonmez and Sonmez-Switzer mechanisms can be c...

Coercive Trade Policy

By Vincent Anesi and Giovanni Facchini

American Economic Journal: Microeconomics, August 2019

Coercion is used by one government (the "sender") to influence the trade practices of another (the "target"). We build a two-country trade model in which coercion can be exercised unilaterally or channeled through a "weak" international organization witho...

Copyright and Generic Entry in Book Publishing

By Imke Reimers

American Economic Journal: Microeconomics, August 2019

Taking works off copyright promotes their availability, but it also allows generic entry to dissipate producer surplus. This paper examines the effect of a copyright on the availability and price of books when incentives to create new works are not affect...

Multidimensional Reasoning in Games: Framework, Equilibrium, and Applications

By Ayala Arad and Ariel Rubinstein

American Economic Journal: Microeconomics, August 2019

We develop a framework for analyzing multidimensional reasoning in strategic interactions, which is motivated by two experimental findings: (i) in games with a large and complex strategy space, players tend to think in terms of strategy characteristics ra...

Newspapers in Times of Low Advertising Revenues

By Charles Angelucci and Julia Cagé

American Economic Journal: Microeconomics, August 2019

We model the consequences on newspapers' content and prices of a reduction in advertising revenues. Newspapers choose the size of their newsroom, and readers are heterogeneous in their ideal amount of journalistic-intensive content. We show that a reducti...

Front Matter

American Economic Journal: Economic Policy, August 2019

The Long-Run Impacts of a Universal Child Care Program

By Michael Baker, Jonathan Gruber, and Kevin Milligan

American Economic Journal: Economic Policy, August 2019

Past research documents the persistence of positive impacts of early life interventions on noncognitive skills. We test the symmetry of this finding by studying the persistence of a sizeable negative shock to noncognitive outcomes arising with the introdu...