Evolution and Human Nature

[Symposium: Evolutionary Economics]

By Arthur J. Robson

Journal of Economic Perspectives, Spring 2002

This paper considers how biological evolution shaped the elements of a simple but complete model of economic decision making. These elements are preferences, beliefs and rationality. Whereas Nature might impose preferences over consumption on the individu...

Front Matter

American Economic Journal: Microeconomics, May 2020

Biased-Belief Equilibrium

By Yuval Heller and Eyal Winter

American Economic Journal: Microeconomics, May 2020

We investigate how distorted, yet structured, beliefs can persist in strategic situations. Specifically, we study two-player games in which each player is endowed with a biased-belief function that represents the discrepancy between a player's beliefs abo...

Digitizing Disclosure: The Case of Restaurant Hygiene Scores

By Weijia Dai and Michael Luca

American Economic Journal: Microeconomics, May 2020

Collaborating with Yelp and the City of San Francisco, we revisit a canonical example of quality disclosure by evaluating and helping to redesign the posting of restaurant hygiene scores on Yelp.com. We implement a two-stage intervention that separately i...

Regulatory Competition and the Market for Corporate Law

By Ofer Eldar and Lorenzo Magnolfi

American Economic Journal: Microeconomics, May 2020

This article develops an empirical model of firms' choice of corporate laws under inertia. Delaware dominates the incorporation market, though recently Nevada, a state whose laws are highly protective of managers, has acquired a sizable market share. Usin...

Competition, Product Proliferation, and Welfare: A Study of the US Smartphone Market

By Ying Fan and Chenyu Yang

American Economic Journal: Microeconomics, May 2020

This paper studies (1) whether, from a welfare point of view, oligopolistic competition leads to too few or too many products in a market, and (2) how a change in competition affects the number and the composition of product offerings. We address these tw...

Incomplete Information Games with Ambiguity Averse Players

By Eran Hanany, Peter Klibanoff, and Sujoy Mukerji

American Economic Journal: Microeconomics, May 2020

We study incomplete information games with ambiguity averse players. Our focus is on equilibrium concepts satisfying sequential optimality—each player's strategy is optimal at each information set given opponents' strategies. We show sequential optimali...

The Role of Economics in Climate Change Policy

By Warwick J. McKibbin and Peter J. Wilcoxen

Journal of Economic Perspectives, Spring 2002

The most important characteristic of climate change as a policy problem is uncertainty. From climatology to economics, uncertainties are pervasive, large and difficult to resolve. However, the economic theory of environmental policy under uncertainty prov...

Job Insecurity

By Aditya Kuvalekar and Elliot Lipnowski

American Economic Journal: Microeconomics, May 2020

We examine the relationship between job security and productivity in a fixed wage worker-firm relationship facing match quality uncertainty. The worker's action affects both learning and current productivity. The firm, seeing worker behavior and outcomes,...

Revealed Preference Implications of Backward Induction and Subgame Perfection

By Pablo Schenone

American Economic Journal: Microeconomics, May 2020

Consider a decision-maker (DM) who must select an alternative from a set of mutually exclusive alternatives but must take this decision sequentially. If the DM's choice correspondence over subsets of alternatives satisfies the weak axiom of revealed prefe...

The Economics of Crowdfunding

By Jen-Wen Chang

American Economic Journal: Microeconomics, May 2020

An entrepreneur finances her project via crowdfunding. She chooses a funding mechanism (fixed or flexible), a price, and a funding goal. Under fixed funding, money is refunded if the goal is not met; under flexible funding, there is no refund. Backers obs...

The Economics of Patents: Lessons from Recent U.S. Patent Reform

By Nancy T. Gallini

Journal of Economic Perspectives, Spring 2002

U.S. patent reform over the past two decades has strengthened the legal enforcement of patent rights and has extended protection to new subject matter, such as genetically engineered life forms and business methods. This paper highlights these and other p...

Front Matter

American Economic Review, May 2020

A Model of Complex Contracts

By Alexander M. Jakobsen

American Economic Review, May 2020

I study a mechanism design problem involving a principal and a single, boundedly rational agent. The agent transitions among belief states by combining current beliefs with up to K pieces of information at a time. By expressing a mechanism as a complex co...

Heterogeneous Beliefs and School Choice Mechanisms

By Adam J. Kapor, Christopher A. Neilson, and Seth D. Zimmerman

American Economic Review, May 2020

This paper studies how welfare outcomes in centralized school choice depend on the assignment mechanism when participants are not fully informed. Using a survey of school choice participants in a strategic setting, we show that beliefs about admissions ch...

Interest Rates under Falling Stars

By Michael D. Bauer and Glenn D. Rudebusch

American Economic Review, May 2020

Macro-finance theory implies that trend inflation and the equilibrium real interest rate are fundamental determinants of the yield curve. However, empirical models of the term structure of interest rates generally assume that these fundamentals are consta...

Losing Prosociality in the Quest for Talent? Sorting, Selection, and Productivity in the Delivery of Public Services

By Nava Ashraf, Oriana Bandiera, Edward Davenport, and Scott S. Lee

American Economic Review, May 2020

We embed a field experiment in a nationwide recruitment drive for a new health care position in Zambia to test whether career benefits attract talent at the expense of prosocial motivation. In line with common wisdom, offering career opportunities attract...

The Reach of Radio: Ending Civil Conflict through Rebel Demobilization

By Alex Armand, Paul Atwell, and Joseph F. Gomes

American Economic Review, May 2020

We examine the role of FM radio in mitigating violent conflict. We collect original data on radio broadcasts encouraging defections during the Lord's Resistance Army (LRA) insurgency. This constitutes the first quantitative evaluation of an active counter...

Forced Migration and Human Capital: Evidence from Post-WWII Population Transfers

By Sascha O. Becker, Irena Grosfeld, Pauline Grosjean, Nico Voigtländer, and Ekaterina Zhuravskaya

American Economic Review, May 2020

We study the long-run effects of forced migration on investment in education. After World War II, millions of Poles were forcibly uprooted from the Kresy territories of eastern Poland and resettled ( primarily) in the newly acquired Western Territories, f...

Learning under Diverse World Views: Model-Based Inference

By George J. Mailath and Larry Samuelson

American Economic Review, May 2020

People reason about uncertainty with deliberately incomplete models. How do people hampered by different, incomplete views of the world learn from each other? We introduce a model of "model-based inference." Model-based reasoners partition an otherwise ho...