Top Journals

Vincent P. Crawford, "New Directions for Modelling Strategic Behavior: Game-theoretic Models of Communication, Coordination, and Cooperation in Economic Relationships"

Posted: 30/11/2016

Vincent P. Crawford, "New Directions for Modelling Strategic Behavior: Game-theoretic Models of Communication, Coordination, and Cooperation in Economic Relationships", Journal of Economic Perspectives 30(4), Fall 2016, 131–150.

Open access link https://www.aeaweb.org/articles?id=10.1257/jep.30.4.131

 

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H. Peyton Young and Paul Glasserman publish 'Contagion in Financial Networks' in the Journal of Economic Literature 2016, 54(3), 779–831

Posted: 15/11/2016

Journal of Economic Litterature 2016, 54(3), 779–831

Abstract:

The recent financial crisis has prompted much new research on the interconnectedness of the modern financial system and the extent to which it contributes to systemic fragility. Network connections diversify firms’ risk exposures, but they also create channels through which shocks can spread by contagion. We review the extensive literature on this issue, with the focus on how network structure interacts with other key variables such as leverage, size, common exposures, and short-term funding. We discuss various metrics that have been proposed for evaluating the susceptibility of the system to contagion and suggest directions for future research.

(JEL D85, E44, G01, G21, G22, G23, G28)

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Marco Gonzalez-Navarro and Climent Quintana-Domeque, Review of Economics and Statistics, May 2016, Vol. 98, No. 2: 254–267

Posted: 18/05/2016

Review of Economics and Statistics, May 2016, Vol. 98, No. 2: 254–267.

Abstract:

We provide the first experimental estimation of the effects of the supply of publicly financed urban infrastructure on property values. Using random allocation of first-time street asphalting of residential streets located in peripheral neighborhoods in Mexico, we show that within two years of the intervention, households are able to transform their increased property wealth into significantly larger rates of vehicle ownership, household appliances, and home improvements. Increased consumption is made possible by both credit use and less saving. A cost-benefit analysis indicates that the valuation of street asphalting as capitalized into property values is about as large as construction costs.

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Itai Arieli and H. Peyton Young, Stochastic Learning Dynamics and Speed of Convergence in Population Games. Econometrica, Vol. 84, No. 2 (March, 2016), 627-676

Posted: 21/03/2016

Econometrica, Vol. 84, No. 2 (March, 2016), 627-676

Abstract:

We study how long it takes for large populations of interacting agents to come close to Nash equilibrium when they adapt their behavior using a stochastic better reply dynamic. Prior work considers this question mainly for 2×2 games and potential games; here we characterize convergence times for general weakly acyclic games, including coordination games, dominance solvable games, games with strategic complementarities, potential games, and many others with applications in economics, biology, and distributed control. If players’ better replies are governed by idiosyncratic shocks, the convergence time can grow exponentially in the population size; moreover, this is true even in games with very simple payoff structures. However, if their responses are sufficiently correlated due to aggregate shocks, the convergence time is greatly accelerated; in fact, it is bounded for all sufficiently large populations. We provide explicit bounds on the speed of convergence as a function of key structural parameters including the number of strategies, the length of the better reply paths, the extent to which players can influence the payoffs of others, and the desired degree of approximation to Nash equilibrium.

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James Malcomson, Relational Incentive Contracts With Persistent Private Information. Econometrica, Vol. 84, No. 1 (January, 2016), 317–346

Posted: 29/02/2016

Econometrica, Vol. 84, No. 1 (January, 2016), 317–346

Abstract:
This paper investigates relational incentive contracts with continuous, privately observed agent types that are persistent over time. With fixed agent types, full separation is not possible when continuation equilibrium payoffs following revelation are on the Pareto frontier of attainable payoffs. This result is related to the ratchet effect in that: (1) a type imitating a less productive type receives an information rent, and (2) with full separation, one imitating a more productive type receives the same future payoff as that more productive type. However, the reason for (2) is fundamentally different than with the ratchet effect. It arises from the dynamic enforcement requirement in relational contracts, not from the principal having all the bargaining power, and applies whatever the distribution between principal and agent of the future gains from the relationship (i.e., whatever the point on the Pareto frontier). This result extends to sufficiently persistent types under certain conditions.

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Mark Armstrong and Jidong Zhou, “Search Deterrence” Review of Economic Studies (2016) 83 (1): 26-57 doi:10.1093/restud/rdv036.

Posted: 16/02/2016

Mark Armstrong and Jidong Zhou, “Search Deterrence” Review of Economic Studies (2016) 83 (1): 26-57 doi:10.1093/restud/rdv036.

 

Abstract:

We study sales techniques which discourage consumer search by making it harder or more expensive to return to buy after a search for alternatives. It is unilaterally profitable for a seller to deter search under mild conditions, but sellers can suffer when all do so. When a seller cannot commit to its policy, it exploits the inference that those consumers who try to buy later have no good alternative, and in many cases the outcome is as if the seller must make an exploding offer. Search deterrence results in sub-optimal matching of products to consumers and often raises the price consumers pay.

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Nonparametric Welfare Analysis for Discrete Choice

Posted: 07/04/2015

Bhattacharya, D. (2015), Nonparametric Welfare Analysis for Discrete Choice. Econometrica, 83: 617–649. doi: 10.3982/ECTA12574

We consider empirical measurement of equivalent variation (EV) and compensating variation (CV) resulting from price change of a discrete good using individual-level data when there is unobserved heterogeneity in preferences. We show that for binary and unordered multinomial choice, the marginal distributions of EV and CV can be expressed as simple closed-form functionals of conditional choice probabilities under essentially unrestricted preference distributions. These results hold even when the distribution and dimension of unobserved heterogeneity are neither known nor identified, and utilities are neither quasilinear nor parametrically specified. The welfare distributions take simple forms that are easy to compute in applications. In particular, average EV for a price rise equals the change in average Marshallian consumer surplus and is smaller than average CV for a normal good. These nonparametric point-identification results fail for ordered choice if the unit price is identical for all alternatives, thereby providing a connection to Hausman–Newey's (2014) partial identification results for the limiting case of continuous choice.

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PERCEIVED AMBIGUITY AND RELEVANT MEASURES

Posted: 16/10/2014

Sujoy Mukerji, P. Klibanoff and K. Seo, 'PERCEIVED AMBIGUITY AND RELEVANT MEASURES,' Econometrica, Vol. 82, No. 5 (September, 2014), 1945–1978

 

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Empirical Evidence on Inflation expectations in the New Keynesian Phillips curve

Posted: 13/10/2014

Sophocles Mavroeidis, Mikkel Plagborg-Møller and James H. Stock, 'Empirical Evidence on Inflation Expectations in the New Keynesian Phillips Curve,' Journal of Economic Literature, 2014, vol. 52, No. 1, 124-188.

DOI: 10.1257/jel.52.1.124

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Identification using stability restrictions

Posted: 13/10/2014

Leandro M. Magnusson and Sophocles Mavroeidis, 'Identification using stability restrictions,' Econometrica, October 2014, vol. 82, No. 5, 1799-1851.

DOI: 10.3982/ECTA9612

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The Macroeconomics of Trend Inflation

Posted: 30/09/2014

Ascari, Guido, and Argia M. Sbordone. 2014. "The Macroeconomics of Trend Inflation." Journal of Economic Literature, 52(3): 679-739.

 

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The Weight of the Crisis: Evidence from Newborns in Argentina (The Review of Economics & Statistics, 2014)

Posted: 21/07/2014

Carlos Bozzoli, Climent Quintana-Domeque, 'The Weight of the Crisis: Evidence from Newborns in Argentina', The Review of Economics and Statistics, July 2014, 96(3): 550-562.

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Revealed Preference Tests of the Cournot Model

Posted: 09/12/2013

Andrés Carvajal, Rahul Deb, James Fenske, John K.-H. Quah, 'Revealed Preference Tests of the Cournot Model', Econometrica, 2013, Vol. 81 (6), pp 2351-2379. First published online 13 November 2013. DOI: 10.3982/ECTA10175

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Contractual Incompleteness, Unemployment, and Labour Market Segmentation

Posted: 12/02/2014

Steffen Altmann, Armin Falk, Andreas Grunewald, David Huffman, 'Contractual Incompleteness, Unemployment, and Labour Market Segmentation', Review of Economic Studies (2014) 81, 30-56. First published online October 23, 2013. DOI: 10.1093/restud/rdt034.

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Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power

Posted: 26/11/2013

Martin Browning, Pierre-André Chiappori, Arthur Lewbel, 'Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power', Review of Economic Studies (2013) 80 (4): 1267-1303.  First published online July 5, 2013. DOI:10.1093/restud/rdt019

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Discounted Stochastic Games With No Stationary Nash Equilibrium: Two Examples

Posted: 26/11/2013

Yehuda Levy, 'Discounted Stochastic Games With No Stationary Nash Equilibrium: Two Examples', Econometrica, 2013, Vol. 81 (5), pp 1973-2007. First published online 18 September 2013.
DOI: 10.3982/ECTA10530

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Extreme Wage Inequality: Pay at the Very Top (American Economic Review, May 2013)

Posted: 12/06/2013

Brian D. Bell, John Van Reenen, "Extreme Wage Inequality: Pay at the Very Top", American Economic Review, 103(3): 153-57.

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Vincent P. Crawford, "Boundedly Rational versus Optimization-Based Models of Strategic Thinking and Learning in Games"

Posted: 30/06/2013

Vincent P. Crawford, "Boundedly Rational versus Optimization-Based Models of Strategic Thinking and Learning in Games," Journal of Economic Literature 51 (June 2013), 512-527

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Vincent P. Crawford, "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications" (with Miguel Costa-Gomes and Nagore Iriberri),

Posted: 30/06/2013

Vincent P. Crawford, "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications" (with Miguel Costa-Gomes and Nagore Iriberri), Journal of Economic Literature 51 (March 2013), 5-62. 

 

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Vincent P. Crawford, "Players of Matching Pennies Automatically Imitate Opponents’ Gestures Against Strong Incentives" (with Michèle Belot and Cecilia Heyes)

Posted: 30/06/2013

Vincent P. Crawford, "Players of Matching Pennies Automatically Imitate Opponents’ Gestures Against Strong Incentives" (with Michèle Belot and Cecilia Heyes), Proceedings of the National Academy of Sciences USA 110(8) (19 February 2013), 2763-2768.

 

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How the Allocation of Children’s Time Affects Cognitive and Non-Cognitive Development (Journal of Labor Economics, 2013)

Posted: 11/06/2013

Michael P. Keane, "How the Allocation of Children's Time Affects Cognitive and Non-Cognitive Development", Journal of Labor Economics, 2013.

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Social Networks and Research Output (Review of Economics and Statistics, 2013)

Posted: 11/06/2013

Lorenzo Ductor, Marcel Fafchamps, Sanjeev Goyal, Marco van der Leij, "Social Networks and Research Output", Review of Economics and Statistics, 2013 (forthcoming)

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Testing Unilateral and Bilateral Link Formation (Economic Journal, 2013)

Posted: 11/06/2013

Margherita Comola, Marcel Fafchamps, "Testing Unilateral and Bilateral Link Formation", Economic Journal, 2013 (forthcoming)

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Regulated Prices, Rent Seeking and Consumer Surplus

Posted: 02/11/2012

Jeremy Bulow, Paul Klemperer, 'Regulated Prices, Rent Seeking, and Consumer Surplus', Journal of Political Economy, 2012, Vol. 120(1), pp 160-86.

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Optimal fiscal Feedback on Debt in an Economy with Nominal Rigidities

Posted: 06/09/2012

Tatiana Kirsanova, Simon Wren-Lewis, 'Optimal fiscal Feedback on Debt in an Economy with Nominal Rigidities', Economic Journal, 2012, Vol. 122, pp 238-64.

 

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