Discounts as a Barrier to Entry

By Enrique Ide, Juan-Pablo Montero, and Nicolás Figueroa

American Economic Review, July 2016

To what extent can an incumbent manufacturer use discount contracts to foreclose efficient entry? We show that off-list-price rebates that do not commit buyers to unconditional transfers--like the rebates in EU Commission v. Michelin II, for instance--can...

Promotional Reviews: An Empirical Investigation of Online Review Manipulation

By Dina Mayzlin, Yaniv Dover, and Judith Chevalier

American Economic Review, August 2014

Firms' incentives to manufacture biased user reviews impede review usefulness. We examine the differences in reviews for a given hotel between two sites: Expedia.com (only a customer can post a review) and TripAdvisor.com (anyone can post). We argue that ...

Government Policy for a Partially Deregulated Industry: Deregulate It Fully

By Clifford Winston

American Economic Review, May 2012

Alfred Kahn was a major force behind regulatory reform that initially benefited air travelers and subsequently consumers in other industries by placing greater reliance on markets than on regulators to allocate resources. Kahn also believed that effective...

Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products

By Gilles Duranton and Diego Puga

American Economic Review, December 2001

This paper develops microfoundations for the role that diversified cities play in fostering innovation. A simple model of process innovation is proposed, where firms learn about their ideal production process by making prototypes. We build around this a d...

Creating Property Rights: Land Banks in Ghana

By Ernest Aryeetey and Christopher Udry

American Economic Review, May 2010

The Response of Household Consumption to Income Tax Refunds

By Nicholas S. Souleles

American Economic Review, September 1999

Dynamic Matching and Bargaining Games: A General Approach

By Stephan Lauermann

American Economic Review, April 2013

Dynamic matching and bargaining games are models of decentralized markets with trading frictions. A central objective is to investigate how equilibrium outcomes depend on the level of frictions. In particular, does the trading outcome become Walrasian ...

Retrospectives: Guinnessometrics: The Economic Foundation of "Student's" t

By Stephen T. Ziliak

Journal of Economic Perspectives, Fall 2008

In economics and other sciences, "statistical significance" is by custom, habit, and education a necessary and sufficient condition for proving an empirical result. The canonical routine is to calculate what's called a t-statistic and then to compare its ...

The Cycle of Violence? An Empirical Analysis of Fatalities in the Palestinian-Israeli Conflict

By David A. Jaeger and M. Daniele Paserman

American Economic Review, September 2008

This paper examines the dynamics of violence in the Palestinian-Israeli conflict during the Second Intifada. Using data on the daily number of fatalities between September 2000 and January 2005, we estimate reaction functions for both Israelis and Palesti...

Global Environmental Risks

[Symposium]

By Graciela Chichilnisky and Geoffrey Heal

Journal of Economic Perspectives, Fall 1993

We consider the economics of global environmental risks. In this area, we are dealing with risks that are poorly understood, endogenous, collective, and irreversible. In policy terms, the nature and extent of uncertainty about global climate change implie...

Recommendations for Further Reading

By Bernard Saffran

Journal of Economic Perspectives, Winter 2001

Ambiguity Models and the Machina Paradoxes

By Aurélien Baillon, Olivier L'Haridon, and Laetitia Placido

American Economic Review, June 2011

Machina (2009) introduced two examples that falsify Choquet expected utility, presently one of the most popular models of ambiguity. This article shows that Machina's examples falsify not only the model mentioned, but also four other popular models for am...

The Effects of Pharmaceutical Marketing and Promotion on Adverse Drug Events and Regulation

By Guy David, Sara Markowitz, and Seth Richards-Shubik

American Economic Journal: Economic Policy, November 2010

This paper analyzes the relationship between postmarketing promotional activity and reporting of adverse drug reactions (ADRs) by modeling the interaction between a regulator (the FDA) and a pharmaceutical firm. Promotion-driven market expansions enhance...

Environmental Problems and Policy: 2000-2050

[Symposium: Forecasts for the Future of the Economy]

By Paul R. Portney

Journal of Economic Perspectives, Winter 2000

The next 50 years will see more use of market-based tools for environmental protection. Regulatory authorities everywhere will require polluters to report emissions. Authority will leak away from national governments; some will be devolved to lower levels...

Post-Selection and Post-Regularization Inference in Linear Models with Many Controls and Instruments

By Victor Chernozhukov, Christian Hansen, and Martin Spindler

American Economic Review, May 2015

We consider estimation of and inference about coefficients on endogenous variables in a linear instrumental variables model where the number of instruments and exogenous control variables are each allowed to be larger than the sample size. We work within ...

How Do Mortgage Subsidies Affect Home Ownership? Evidence from the Mid-Century GI Bills

By Daniel K. Fetter

American Economic Journal: Economic Policy, May 2013

The largest twentieth-century increase in US home ownership occurred between 1940 and 1960, associated largely with declining age at first ownership. I shed light on the contribution of coincident government mortgage market interventions by examining h...

Family Economics Writ Large

By Jeremy Greenwood, Nezih Guner, and Guillaume Vandenbroucke

Journal of Economic Literature, December 2017

Powerful currents have reshaped the structure of families over the last century. There has been (1) a dramatic drop in fertility and greater parental investment in children; (2) a rise in married female labor-force participation; (3) a significant decline...

"Reverse Bayesianism": A Choice-Based Theory of Growing Awareness

By Edi Karni and Marie-Louise Vierø

American Economic Review, December 2013

This article introduces a new approach to modeling the expanding universe of decision makers in the wake of growing awareness, and invokes the axiomatic approach to model the evolution of decision makers' beliefs as awareness grows. The expanding unive...

The Role of Trade and Competitiveness Measures in US Climate Policy

By Carolyn Fischer and Alan K. Fox

American Economic Review, May 2011

We review the proposed measures for addressing competitiveness and carbon leakage concerns in recent US climate policy legislation. For eligible energy-intensive, trade-exposed sectors, output-based rebates would initially dampen cost increases; later, bo...

Sinking, Swimming, or Learning to Swim in Medicare Part D

By Jonathan D. Ketcham, Claudio Lucarelli, Eugenio J. Miravete, and M. Christopher Roebuck

American Economic Review, October 2012

Under Medicare Part D, senior citizens choose prescription drug insurance offered by numerous private insurers. We examine nonpoor enrollees- actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81 p...