How Demanding Is the Revealed Preference Approach to Demand?

By Timothy K. M. Beatty and Ian A. Crawford

American Economic Review, October 2011

A well-known problem with revealed preference methods is that when data are found to satisfy their restrictions it is hard to know whether this should be viewed as a triumph for economic theory, or a warning that these conditions are so undemanding that a...

Legislative Bargaining under Weighted Voting

By James M. Snyder Jr., Michael M. Ting, and Stephen Ansolabehere

American Economic Review, September 2005

Organizations often distribute resources through weighted voting. We analyze this setting using a noncooperative bargaining game based on the Baron-Ferejohn (1989) model. Unlike analyses derived from cooperative game theory, we find that each voter's expe...

About Capital in the Twenty-First Century

By Thomas Piketty

American Economic Review, May 2015

In this article, I present three key facts about income and wealth inequality in the long run emerging from my book, Capital in the Twenty-First Century, and seek to sharpen and refocus the discussion about those trends. In particular, I clarify ...

The Long-Run Effect of Mexican Immigration on Crime in US Cities: Evidence from Variation in Mexican Fertility Rates

By Aaron Chalfin

American Economic Review, May 2015

Using historical data on the size of state-specific Mexican birth cohorts and geographic migration networks between Mexican states and US metropolitan areas, I construct an instrumental variable that predicts decadal migration from Mexico to the United St...

Inflation-Targeting, Exchange-Rate Pass-Through, and Volatility

By Maurice Obstfeld

American Economic Review, May 2002

Did the Elimination of Mandatory Retirement Affect Faculty Retirement?

By Orley Ashenfelter and David Card

American Economic Review, September 2002

A special exemption from the 1986 Age Discrimination Act allowed colleges and universities to enforce mandatory retirement of faculty at age 70 until 1994. We construct a survey that permits us to compare faculty turnover rates before and after the law ch...

Trade, Labor Market Frictions, and Residual Wage Inequality across Worker Groups

By Pravin Krishna, Jennifer P. Poole, and Mine Zeynep Senses

American Economic Review, May 2012

Using a matched employer-employee data set, we study the effects of trade liberalization on wage dispersion in Brazil across heterogeneous worker groups, keeping in mind that the assignment of workers to firms may be non-random and determined by the time-...

Field Centipedes

By Ignacio Palacios-Huerta and Oscar Volij

American Economic Review, September 2009

In the centipede game, all standard equilibrium concepts dictate that the player who decides first must stop the game immediately. There is vast experimental evidence, however, that this rarely occurs. We first conduct a field experiment in which highly r...

Interpreting Aggregate Wage Growth: The Role of Labor Market Participation

By Richard Blundell, Howard Reed, and Thomas M. Stoker

American Economic Review, September 2003

A new and easily implementable framework for the empirical analysis of the relationship between aggregate and individual wages is developed. Aggregate real wages are shown to contain three important bias terms: one associated with the dispersion of indivi...

Selling Spectrum Rights

By John McMillan

Journal of Economic Perspectives, Summer 1994

The design of the FCC spectrum-license auction is a case study in the application of economic theory. Auction theory helped address policy questions such as: Should an open auction or a sealed-bid auction be used? Should the licenses be auctioned sequenti...

Endogenous Inequality in Integrated Labor Markets with Two-Sided Search

By George J. Mailath, Larry Samuelson, and Avner Shaked

American Economic Review, March 2000

We consider a market with "red" and "green" workers, where labels are payoff irrelevant. Workers may acquire skills. Skilled workers search for vacancies, while firms search for workers. A unique symmetric equilibrium exists in which color is irrelevant. ...

Estimating the Willingness to Pay to Avoid Violent Crime: A Dynamic Approach

By Kelly C. Bishop and Alvin D. Murphy

American Economic Review, May 2011

The hedonic model, which has been used extensively in the Environmental, Urban, and Real Estate literatures, allows for the estimation of the implicit prices of housing and neighborhood attributes, as well as households' demand for these non-marketed amen...

Skill-Sorting, Self-Selectivity, and Immigration Policy Regime Change: Two Surveys of Chinese Graduate Students' Intention to Study Abroad

By Yiu Por Chen

American Economic Review, May 2005

Bundle-Size Pricing as an Approximation to Mixed Bundling

By Chenghuan Sean Chu, Phillip Leslie, and Alan Sorensen

American Economic Review, February 2011

Multiproduct firms can set separate prices for all possible bundled combinations of its products "mixed bundling"). However, this is impractical for firms with more than a few products, because the number of prices increases exponentially with the number ...

How Do Hospitals Respond to Price Changes?

By Leemore S. Dafny

American Economic Review, December 2005

This paper examines hospital responses to changes in diagnosis-specific prices by exploiting a 1988 policy reform that generated large price changes for 43 percent of Medicare admissions. I find hospitals responded primarily by "upcoding" patients to diag...

Labor Market Effects of Social Programs: Evidence from India's Employment Guarantee

By Clément Imbert and John Papp

American Economic Journal: Applied Economics, April 2015

We estimate the effect of a large rural workfare program in India on private employment and wages by comparing trends in districts that received the program earlier relative to those that received it later. Our results suggest that public sector hiring cr...

Good Principals or Good Peers? Parental Valuation of School Characteristics, Tiebout Equilibrium, and the Incentive Effects of Competition among Jurisdictions

By Jesse M. Rothstein

American Economic Review, September 2006

In a multicommunity model, high-income families cluster together in any equilibrium, and cluster near effective schools if effectiveness is an important component of community desirability. Governmental fragmentation facilitates this residential sorting. ...

Fiscal Unions

By Emmanuel Farhi and Iván Werning

American Economic Review, December 2017

We study cross-country risk sharing as a second-best problem for members of a currency union using an open economy model with nominal rigidities and provide two key results. First, we show that if financial markets are incomplete, the value of gaining acc...

Impossibility of Collusion under Imperfect Monitoring with Flexible Production

By Yuliy Sannikov and Andrzej Skrzypacz

American Economic Review, December 2007

We show that it is impossible to achieve collusion in a duopoly when (a) goods are homogenous and firms compete in quantities; (b) new, noisy information arrives continuously, without sudden events; and (c) firms are able to respond to new information ...

Knowledge Spillovers and Inequality

By Jan Eeckhout and Boyan Jovanovic

American Economic Review, December 2002

We develop a dynamic model with knowledge spillovers in production. The model contains two opposing forces. Imitation of other firms helps followers catch up with leaders, but the prospect of doing so makes followers want to free ride. The second force do...