Health Insurance Design Meets Saving Incentives: Consumer Responses to Complex Contracts

By Adam Leive

American Economic Journal: Applied Economics, April 2022

To lower health care costs, Health Savings Accounts (HSAs) offer tax incentives encouraging people to trade off current consumption against future consumption. This paper tests whether consumers use HSAs as self-insurance over the life cycle. Using admini...

Unemployment Insurance as a Worker Indiscipline Device? Evidence from Scanner Data

By Lester Lusher, Geoffrey C. Schnorr, and Rebecca L.C. Taylor

American Economic Journal: Applied Economics, April 2022

We provide causal evidence of an ex ante moral hazard effect of unemployment insurance (UI) by matching plausibly exogenous changes in UI benefit duration across state-weeks during the Great Recession to high-frequency productivity measures from individua...

Selling Consumer Data for Profit: Optimal Market-Segmentation Design and Its Consequences

By Kai Hao Yang

American Economic Review, April 2022

A data broker sells market segmentations to a producer with private cost who sells a product to a unit mass of consumers. This paper characterizes the revenue-maximizing mechanisms for the data broker. Every optimal mechanism induces quasi-perfect price d...

Asset Price Booms and Macroeconomic Policy: A Risk-Shifting Approach

By Franklin Allen, Gadi Barlevy, and Douglas Gale

American Economic Journal: Macroeconomics, April 2022

This paper uses a risk-shifting model to analyze policy responses to asset price booms. We show risk shifting leads to inefficient asset and credit booms in which asset prices can exceed fundamentals. However, the inefficiencies associated with risk shift...

Friend-Based Ranking

By Francis Bloch and Matthew Olckers

American Economic Journal: Microeconomics, May 2022

We analyze the design of a mechanism to extract a ranking of individuals according to a unidimensional characteristic, such as ability or need. Individuals, connected on a social network, only have local information about the ranking. We show that a plann...

Optimal Nonlinear Pricing by a Dominant Firm under Competition

By Yong Chao, Guofu Tan, and Adam Chi Leung Wong

American Economic Journal: Microeconomics, May 2022

We consider a nonlinear pricing problem faced by a dominant firm competing with a minor firm. The dominant firm offers a general tariff first, and then the minor firm responds with a per-unit price, followed by a buyer choosing her purchases. By developin...

Intermediation and Steering: Competition in Prices and Commissions

By Tat-How Teh and Julian Wright

American Economic Journal: Microeconomics, May 2022

We explore the implications of steering by an informed profit-maximizing intermediary. The intermediary steers consumers by recommending firms, taking into account both the commissions firms offer and the prices they set. Such steering results in higher c...

Second-Degree Price Discrimination by a Two-Sided Monopoly Platform

By Doh-Shin Jeon, Byung-Cheol Kim, and Domenico Menicucci

American Economic Journal: Microeconomics, May 2022

We study second-degree price discrimination by a two-sided monopoly platform. The incentive constraints of the agents on the value creation side may be in conflict with internalizing externalities on the value capture side, which may render pooling optima...

False Positives and Transparency

By Jonathan Libgober

American Economic Journal: Microeconomics, May 2022

I develop a theoretical model of costly information acquisition in order to evaluate transparency requirements in empirical research. A sender chooses an experiment characterized by multiple dimensions, while a receiver observes the experiment's outcome (...

Bad News Turned Good: Reversal under Censorship

By Aleksei Smirnov and Egor Starkov

American Economic Journal: Microeconomics, May 2022

Sellers often have the power to censor the reviews of their products. We explore the effect of these censorship policies in markets where some consumers are unaware of possible censorship. We find that if the share of such "naïve" consumers is not too la...

Bargaining over Contingent Contracts under Incomplete Information

By Geoffroy de Clippel, Jack Fanning, and Kareen Rozen

American Economic Review, May 2022

We study bargaining over contingent contracts in problems where private information becomes public or verifiable when the time comes to implement the agreement. We suggest a simple, two-stage game that incorporates important aspects of bargaining. We char...

Bargaining over a Divisible Good in the Market for Lemons

By Dino Gerardi, Lucas Maestri, and Ignacio Monzón

American Economic Review, May 2022

We study bargaining with divisibility and interdependent values. A buyer and a seller trade a divisible good. The seller is privately informed about its quality, which can be high or low. Gains from trade are positive and decreasing in quantity. The buyer...

Signaling and Employer Learning with Instruments

By Gaurab Aryal, Manudeep Bhuller, and Fabian Lange

American Economic Review, May 2022

This paper considers the use of instruments to identify and estimate private and social returns to education within a model of employer learning. What an instrument identifies depends on whether it is hidden from, or transparent (i.e., observed) to, the e...

Multidimensional Auctions of Contracts: An Empirical Analysis

By Yunmi Kong, Isabelle Perrigne, and Quang Vuong

American Economic Review, May 2022

In this paper, we conduct a structural analysis of multi-attribute auctions of contracts with a general allocation rule when private information is multidimensional. Upon modeling bidders' contract value that accounts for their endogenous ex post actions,...

Annotated Listing of New Books

Journal of Economic Literature, March 2002

Poor Performance as a Predictable Outcome: Financing the Administration of Unemployment Insurance

By Marta Lachowska, Alexandre Mas, and Stephen A. Woodbury

AEA Papers and Proceedings, May 2022

Effective administration of unemployment insurance (UI) is central to its ability to smooth consumption and act as an automatic stabilizer. The federal government's method of allocating funds to administer UI gives the states no incentive to provide quali...

Addressing Strategic Uncertainty with Incentives and Information

By Marina Halac, Elliot Lipnowski, and Daniel Rappoport

AEA Papers and Proceedings, May 2022

A principal privately contracts with a set of agents who then simultaneously make a binary decision. Each contract specifies an individual allocation and the information the agent is given about a fundamental state and other agents' contracts. We study th...

Efficient Full Implementation via Transfers: Uniqueness and Sensitivity in Symmetric Environments

By Mariann Ollár and Antonio Penta

AEA Papers and Proceedings, May 2022

We study efficient full implementation via transfers in unique rationalizable strategies in environments that are symmetric in two senses: first, agents display the same total level of preference interdependence; second, types are commonly known to be dra...

Sovereign Debt Auctions in Turbulent Times

By Harold Cole, Daniel Neuhann, and Guillermo Ordoñez

AEA Papers and Proceedings, May 2022

We use a model of multiunit discriminatory auctions with asymmetrically informed risk-averse bidders to analyze Mexican sovereign bond auctions during periods of macroeconomic stress. We argue that the discriminatory protocol provides insurance benefits t...

Hidden Debt

By Bulent Guler, Yasin Kürşat Önder, and Temel Taskin

AEA Papers and Proceedings, May 2022

We study the role of transparency in debt and default dynamics in a quantitative sovereign default model augmented with asymmetric information. We assume that the sovereign debt portfolio is not transparent and part of the debt is not observable to lender...