Stationary Concepts for Experimental 2x2-Games

By Reinhard Selten and Thorsten Chmura

American Economic Review, June 2008

Five stationary concepts for completely mixed 2 x 2-games are experimentally compared: Nash equilibrium, quantal response equilibrium, action-sampling equilibrium, payoff-sampling equilibrium (Martin J. Osborne and Ariel Rubinstein 1998), and impulse b...

Intermediary Asset Pricing

By Zhiguo He and Arvind Krishnamurthy

American Economic Review, April 2013

We model the dynamics of risk premia during crises in asset markets where the marginal investor is a financial intermediary. Intermediaries face an equity capital constraint. Risk premia rise when the constraint binds, reflecting the capital scarcity. T...

Growing Up in the Projects: The Economic Lives of a Cohort of Men Who Came of Age in Chicago Public Housing

By Steven D. Levitt and Sudhir Alladi Venkatesh

American Economic Review, May 2001

Strotz Meets Allais: Diminishing Impatience and the Certainty Effect

By Yoram Halevy

American Economic Review, June 2008

Decision makers tend to exhibit a higher degree of impatience when considering a delay to an immediate reward than when contemplating an identical delay to an equal future reward. This work argues that diminishing impatience originates from the distinctio...

Did We Lose the War on Poverty?

[Symposium: Measuring Poverty]

By Dale W. Jorgenson

Journal of Economic Perspectives, Winter 1998

Official U.S. poverty statistics based on household income imply that the proportion of the U.S. population below the poverty level reached a minimum in 1973, giving rise to the widespread impression that the elimination of poverty is impossible. By contr...

Symposium on Keynesian Economics Today

[Symposium: Keynesian Economics Today]

By N. Gregory Mankiw

Journal of Economic Perspectives, Winter 1993

Risk and Time Preferences: Linking Experimental and Household Survey Data from Vietnam

By Tomomi Tanaka, Colin F. Camerer, and Quang Nguyen

American Economic Review, March 2010

We conducted experiments in Vietnamese villages to determine the predictors of risk and time preferences. In villages with higher mean income, people are less loss-averse and more patient. Household income is correlated with patience but not with risk. We...

Why Don't Present-Biased Agents Make Commitments?

By David Laibson

American Economic Review, May 2015

Present-biased preferences engender a demand for commitment. Commitment is a problematic prediction, since we see so little of it. I quantitatively explore the reasons for the "missing" commitment. Extending the procrastination model in Carroll et al. (20...

A Year of Living Dangerously: The Management of the Financial Crisis in 2008

[Symposium: Financial Regulation after the Crisis]

By Vincent Reinhart

Journal of Economic Perspectives, Winter 2011

There are many reasons to regret the decision of U.S. financial authorities to insert the government into the resolution of the investment bank Bear Stearns in March 2008. The Federal Reserve's use of its discount window built up false hope of future resc...

Identifying the Disadvantaged: Official Poverty, Consumption Poverty, and the New Supplemental Poverty Measure

By Bruce D. Meyer and James X. Sullivan

Journal of Economic Perspectives, Summer 2012

We discuss poverty measurement, focusing on two alternatives to the current official measure: consumption poverty, and the Census Bureau's new Supplemental Poverty Measure (SPM) that was released for the first time last year. The SPM has advantages over ...

Asset Demand Based Tests of Expected Utility Maximization

By Felix Kubler, Larry Selden, and Xiao Wei

American Economic Review, November 2014

We provide conditions under which contingent claim and asset demands are consistent with state independent Expected Utility maximization. The paper focuses on the case of a single commodity and demands are allowed to be functions of probabilities and not ...

Traffic Congestion and Infant Health: Evidence from E-ZPass

By Janet Currie and Reed Walker

American Economic Journal: Applied Economics, January 2011

We exploit the introduction of electronic toll collection, (E-ZPass), which greatly reduced both traffic congestion and vehicle emissions near highway toll plazas. We show that the introduction of E-ZPass reduced prematurity and low birth weight among mo...

The Empirical Implications of the Interest-Rate Lower Bound

By Christopher Gust, Edward Herbst, David López-Salido, and Matthew E. Smith

American Economic Review, July 2017

Using Bayesian methods, we estimate a nonlinear DSGE model in which the interest-rate lower bound is occasionally binding. We quantify the size and nature of disturbances that pushed the US economy to the lower bound in late 2008 as well as the contributi...

The Role of Boards of Directors in Corporate Governance: A Conceptual Framework and Survey

By Renee B. Adams, Benjamin E. Hermalin, and Michael S. Weisbach

Journal of Economic Literature, March 2010

This paper is a survey of the literature on boards of directors, with an emphasis on research done subsequent to the Benjamin E. Hermalin and Michael S. Weisbach (2003) survey. The two questions most asked about boards are what determines their makeup ...

Entry, Exit, Firm Dynamics, and Aggregate Fluctuations

By Gian Luca Clementi and Berardino Palazzo

American Economic Journal: Macroeconomics, July 2016

Firm entry and exit amplify and propagate the effects of aggregate shocks, leading to greater persistence and unconditional variation of aggregate quantities. Following a positive aggregate shock, entry rises. As in the data, entrants are small and their ...

Caballero Meets Bewley: The Permanent-Income Hypothesis in General Equilibrium

By Neng Wang

American Economic Review, June 2003

The Economics of Spam

By Justin M. Rao and David H. Reiley

Journal of Economic Perspectives, Summer 2012

We estimate that American firms and consumers experience costs of almost $20 billion annually due to spam. Our figure is more conservative than the $50 billion figure often cited by other authors, and we also note that the figure would be much higher if i...

Strategic Policy Choice in State-Level Regulation: The EPA's Clean Power Plan

By James B. Bushnell, Stephen P. Holland, Jonathan E. Hughes, and Christopher R. Knittel

American Economic Journal: Economic Policy, May 2017

The EPA's Clean Power Plan sets goals for CO2 emissions rate reductions by 2030 that vary substantially across states. States can choose the regulatory mechanism they use and whether or not to join with other states in implementing their goals....

Changes in Labor Force Participation in the United States

[Symposium: American Employment]

By Chinhui Juhn and Simon Potter

Journal of Economic Perspectives, Summer 2006

The labor force participation rate in the United States increased almost continuously for two-and-a-half decades after the mid-1960s, pausing only briefly during economic downturns. The pace of growth slowed considerably during the 1990s, however, and aft...

Effects of Mergers in Two-Sided Markets: The US Radio Industry

By PrzemysŁaw Jeziorski

American Economic Journal: Microeconomics, November 2014

This study examines mergers in two-sided markets using a structural supply-and-demand model that employs data from the 1996-2006 merger wave in the U.S. radio industry. In particular, it identities the conflicting incentives for merged firms to exercise m...