Screening Inattentive Buyers

By Jeffrey Mensch

American Economic Review, June 2022

Information plays a crucial role in mechanism design problems. A potential complication is that buyers may be inattentive, and so their information may endogenously and flexibly depend on the offered mechanism. I show that it is without loss of generality...

Bargaining with Mechanisms

By Marcin Pęski

American Economic Review, June 2022

Two players bargain over a single indivisible good and a transfer, with one-sided incomplete information about preferences. Both players can offer arbitrary mechanisms to determine the allocation. We show that there is a unique perfect Bayesian equilibriu...

The Liquidity Sensitivity of Healthcare Consumption: Evidence from Social Security Payments

By Tal Gross, Timothy J. Layton, and Daniel Prinz

American Economic Review: Insights, June 2022

Insurance is typically viewed as a mechanism for transferring resources from good to bad states. However, insurance may also transfer resources from high-liquidity periods to low-liquidity periods. We test for this type of transfer from health insurance b...

Robust Predictions in Coasian Bargaining

By Heng Liu

American Economic Review: Insights, June 2022

This paper studies robust predictions when players may have additional information in an otherwise standard seller-offer bargaining with private values. Players' extra information gives rise to higher-order uncertainties about the underlying surplus. We s...

The Gains from Pension Reform

By Assar Lindbeck and Mats Persson

Journal of Economic Literature, March 2003

We classify social security pension systems in three dimensions: actuarial versus non-actuarial, funded versus unfunded, and defined-benefit versus defined-contribution systems. Recent pension reforms are discussed in terms of these dimensions. Shifting t...

Health, Inequality, and Economic Development

By Angus Deaton

Journal of Economic Literature, March 2003

I discuss mechanisms linking health and inequality and review evidence for effects of income inequality on aggregate and individual mortality, over time and over space. I conclude that there is no direct link. Correlations come from factors other than inc...

Learning by Sharing: Monetary Policy and Common Knowledge

By Alexandre N. Kohlhas

American Economic Journal: Macroeconomics, July 2022

A common view states that central bank releases decrease central banks' own information about the economy and are harmful if about inefficient disturbances, such as cost-push shocks. This paper shows how neither is true in a microfounded macroeconomic mod...

Book Reviews

Journal of Economic Literature, March 2003

Adviser Compensation, Endogenous Entry, and the Advice Gap

By Jurre H. Thiel

American Economic Journal: Microeconomics, August 2022

To prevent biased advice, regulators increasingly ban commission payments to financial advisers. Such bans are associated with "advice gaps," meaning that advice becomes less accessible. To understand the trade-off between the quality and accessibility of...

Class Actions and Private Antitrust Litigation

By Albert H. Choi and Kathryn E. Spier

American Economic Journal: Microeconomics, August 2022

When firms collude and charge supracompetitive prices, consumers can bring antitrust lawsuits against the firms. When the litigation cost is low, firms accept the cost as just another cost of doing business, whereas when the cost is high, the firms lower ...

Annotated Listing of New Books

Journal of Economic Literature, March 2003

Acquisition, Aggregation, and Sharing of Information in Sequential-Move Aggregative Games

By Eray Cumbul

American Economic Journal: Microeconomics, August 2022

We study quadratic payoff common-value sequential-move aggregative games with signaling. Applications include Stackelberg quantity-setting, public good contribution, common resource, gas emission, and manufacturer-retailer games. Whereas efficient aggrega...

Investment and Information Acquisition

By Dimitri Migrow and Sergei Severinov

American Economic Journal: Microeconomics, August 2022

We study the interaction between productive investment and persuasion activities in a principal–agent setting with strategic disclosure. In an attempt to persuade the principal, the agent diverts substantial resources from productive activities to info...

Competitive Information Disclosure to an Auctioneer

By Stefan Terstiege and Cédric Wasser

American Economic Journal: Microeconomics, August 2022

We analyze how voluntary disclosure of information by bidders affects the outcome of optimally designed auctions. In a single-object auction environment, we assume that before the revenue-maximizing auctioneer designs the auction, bidders noncooperatively...

Belief Elicitation When More than Money Matters: Controlling for "Control"

By Jean-Pierre Benoît, Juan Dubra, and Giorgia Romagnoli

American Economic Journal: Microeconomics, August 2022

Elicitation mechanisms typically presume only money enters utility functions. However, nonmonetary objectives are confounders. In particular, psychologists argue people favor bets where ability is involved over equivalent random bets—a preference for co...

Stability of Experimental Results: Forecasts and Evidence

By Stefano DellaVigna and Devin Pope

American Economic Journal: Microeconomics, August 2022

How robust are experimental results to changes in design? And can researchers anticipate which changes matter most? We consider a real-effort task with multiple behavioral treatments and examine the stability along six dimensions: (i) pure replication, (i...

Adaptation and Adverse Selection in Markets for Natural Disaster Insurance

By Katherine R. H. Wagner

American Economic Journal: Economic Policy, August 2022

This paper quantifies frictions in uptake, tests for adverse selection, and analyzes welfare effects of proposed reforms in natural disaster insurance markets. I find that willingness to pay is remarkably low. In high-risk flood zones, fewer than 60 perce...

Review of Hoshi and Kashyap's Corporate Financing and Governance in Japan

By Juro Teranishi

Journal of Economic Literature, June 2003

Examining the development of the Japanese financial system since the Meiji era, Hoshi and Kashyap derive a number of interesting propositions on the evolution of bank-centered financing, its contribution to rapid growth, and its future transformation. The...

Separating Ownership and Information

By Paul Voss and Marius Kulms

American Economic Review, September 2022

This paper identifies an upside of the separation of ownership and control, typically the source of inefficiencies in the theory of the firm. Because insiders obtain private information by exercising control, the separation of ownership and control leads ...

Dispersed Behavior and Perceptions in Assortative Societies

By Mira Frick, Ryota Iijima, and Yuhta Ishii

American Economic Review, September 2022

We formulate a model of social interactions and misinferences by agents who neglect assortativity in their society, mistakenly believing that they interact with a representative sample of the population. A key component of our approach is the interplay be...