We show that strategy-proofness, the Pareto principle, anonymity, neutrality, independence of irrelevant alternatives, and decisiveness uniquely characterize majority rule on any domain of preferences for which there exists a voting rule satisfying these axioms. In our formulation, strategy-proofness includes manipulations by coalitions. However, we demonstrate that the characterization still holds when coalitions are restricted to arbitrarily small size. We also show that when coalitions can manipulate outside the domain, there is an extension of majority rule that satisfies these axioms on any domain without Condorcet cycles. (JEL D72)
{"title":"Strategy-Proofness, Independence of Irrelevant Alternatives, and Majority Rule","authors":"P. Dasgupta, E. Maskin","doi":"10.1257/aeri.20200178","DOIUrl":"https://doi.org/10.1257/aeri.20200178","url":null,"abstract":"We show that strategy-proofness, the Pareto principle, anonymity, neutrality, independence of irrelevant alternatives, and decisiveness uniquely characterize majority rule on any domain of preferences for which there exists a voting rule satisfying these axioms. In our formulation, strategy-proofness includes manipulations by coalitions. However, we demonstrate that the characterization still holds when coalitions are restricted to arbitrarily small size. We also show that when coalitions can manipulate outside the domain, there is an extension of majority rule that satisfies these axioms on any domain without Condorcet cycles. (JEL D72)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48699380","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Bernardo S. Blum, S. Claro, Ignatius J. Horstmann, Trevor Tombe
Other than that new exporters account for a large part of aggregate export growth, we know little else. We document that aggregate export growth in Chile is driven by only a few new exporters. These exporters are new business entities, operate new plants, and behave much like experienced exporters: they start large and have high survival rates. Moreover, 70 percent of these new firms are owned by existing businesses and are likely the by-product of either domestic spin-offs or foreign direct investment (24 percent). By focusing on the average new exporter, the existing models of new exporter dynamics miss these key features of export growth. (JEL F14, F23, L22, L60, M13, O14, O19)
{"title":"The DNA of New Exporters: Spin-offs and FDI at the Extensive Margin of Trade","authors":"Bernardo S. Blum, S. Claro, Ignatius J. Horstmann, Trevor Tombe","doi":"10.1257/aeri.20190379","DOIUrl":"https://doi.org/10.1257/aeri.20190379","url":null,"abstract":"Other than that new exporters account for a large part of aggregate export growth, we know little else. We document that aggregate export growth in Chile is driven by only a few new exporters. These exporters are new business entities, operate new plants, and behave much like experienced exporters: they start large and have high survival rates. Moreover, 70 percent of these new firms are owned by existing businesses and are likely the by-product of either domestic spin-offs or foreign direct investment (24 percent). By focusing on the average new exporter, the existing models of new exporter dynamics miss these key features of export growth. (JEL F14, F23, L22, L60, M13, O14, O19)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1257/aeri.20190379","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45434598","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Quality certification not only informs consumers but also stimulates producers to supply better-quality products. We study a problem of quality certification in a moral hazard setting. We show that, under standard assumptions, simple certification systems, such as quality assurance and pass-fail rules, are optimal. Our solution method involves interpreting the certification problem as a delegation problem. (JEL D82, L15)
{"title":"Optimal Quality Certification","authors":"Andriy Zapechelnyuk","doi":"10.1257/AERI.20190387","DOIUrl":"https://doi.org/10.1257/AERI.20190387","url":null,"abstract":"Quality certification not only informs consumers but also stimulates producers to supply better-quality products. We study a problem of quality certification in a moral hazard setting. We show that, under standard assumptions, simple certification systems, such as quality assurance and pass-fail rules, are optimal. Our solution method involves interpreting the certification problem as a delegation problem. (JEL D82, L15)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":"1 1","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1257/AERI.20190387","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44988283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using detailed Internal Revenue Service administrative data on millions of households, we find that households effectively insure against much of the risk facing primary earners. We show that households face less risk than males alone, and households face roughly half the countercyclical risk increase. As a result of these risk differences, household certainty equivalent earnings are 19 percent higher than for males alone, and household certainty equivalent earnings fall by about half as much during recessions. To facilitate related research, we make available the aggregated data used in our analysis. (JEL D12, D13, E32, G51)
{"title":"Earnings Risk in the Household: Evidence from Millions of US Tax Returns","authors":"Seth Pruitt, Nicholas Turner","doi":"10.1257/AERI.20190096","DOIUrl":"https://doi.org/10.1257/AERI.20190096","url":null,"abstract":"Using detailed Internal Revenue Service administrative data on millions of households, we find that households effectively insure against much of the risk facing primary earners. We show that households face less risk than males alone, and households face roughly half the countercyclical risk increase. As a result of these risk differences, household certainty equivalent earnings are 19 percent higher than for males alone, and household certainty equivalent earnings fall by about half as much during recessions. To facilitate related research, we make available the aggregated data used in our analysis. (JEL D12, D13, E32, G51)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46999063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Consider a case in which a new research finding links a health behavior with good health outcomes. A possible consequence is take-up of this behavior among individuals who engage in other positive health behaviors. If this occurs, later analyses of observational data may be biased by the change in selection. This paper evaluates these dynamic biases in empirical settings. Using data from vitamin supplementation and diet, I show that selection responds endogenously to health recommendations. These results highlight how spurious findings on health behaviors can be self-reinforcing. (JEL I12)
{"title":"Health Recommendations and Selection in Health Behaviors","authors":"E. Oster","doi":"10.1257/aeri.20190355","DOIUrl":"https://doi.org/10.1257/aeri.20190355","url":null,"abstract":"Consider a case in which a new research finding links a health behavior with good health outcomes. A possible consequence is take-up of this behavior among individuals who engage in other positive health behaviors. If this occurs, later analyses of observational data may be biased by the change in selection. This paper evaluates these dynamic biases in empirical settings. Using data from vitamin supplementation and diet, I show that selection responds endogenously to health recommendations. These results highlight how spurious findings on health behaviors can be self-reinforcing. (JEL I12)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1257/aeri.20190355","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47796410","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob’s posterior mean closer to Anne’s prior mean. We apply the result in two contexts of games of asymmetric information: voluntary testing or certification, and costly signaling or falsification. IVP can be used to determine how an agent’s behavior responds to additional exogenous or endogenous information. We discuss economic implications. (JEL C11, D82, D84)
{"title":"Information Validates the Prior: A Theorem on Bayesian Updating and Applications","authors":"Navin Kartik, F. Lee, Wing Suen","doi":"10.1257/aeri.20200284","DOIUrl":"https://doi.org/10.1257/aeri.20200284","url":null,"abstract":"We develop a result on expected posteriors for Bayesians with heterogenous priors, dubbed information validates the prior (IVP). Under familiar ordering requirements, Anne expects a (Blackwell) more informative experiment to bring Bob’s posterior mean closer to Anne’s prior mean. We apply the result in two contexts of games of asymmetric information: voluntary testing or certification, and costly signaling or falsification. IVP can be used to determine how an agent’s behavior responds to additional exogenous or endogenous information. We discuss economic implications. (JEL C11, D82, D84)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47143732","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper offers for the first time a global picture of gender discrimination by the law as it affects women's economic opportunity and charts the evolution of legal inequalities over five decades. Using the World Bank's newly constructed Women, Business and the Law database, we document large and persistent gender inequalities, especially with regard to pay and treatment of parenthood. We find positive correlations between more equal laws pertaining to women in the workforce and more equal labor market outcomes, such as higher female labor force participation and a smaller wage gap between men and women. (JEL D63, J16, J31, J71, J78, K31, K38)
{"title":"Gendered Laws and Women in the Workforce","authors":"Marie Hyland, Simeon Djankov, P. Goldberg","doi":"10.1257/AERI.20190542","DOIUrl":"https://doi.org/10.1257/AERI.20190542","url":null,"abstract":"This paper offers for the first time a global picture of gender discrimination by the law as it affects women's economic opportunity and charts the evolution of legal inequalities over five decades. Using the World Bank's newly constructed Women, Business and the Law database, we document large and persistent gender inequalities, especially with regard to pay and treatment of parenthood. We find positive correlations between more equal laws pertaining to women in the workforce and more equal labor market outcomes, such as higher female labor force participation and a smaller wage gap between men and women. (JEL D63, J16, J31, J71, J78, K31, K38)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1257/AERI.20190542","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47748867","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using millions of historical census records and modern birth certificates, we document that immigrants assimilated into US society at similar rates in the past and present. We measure cultural assimilation as immigrants giving their children less foreign names after spending more time in the United States, and show that immigrants erase about one-half of the naming gap with natives after 20 years both historically and today. Immigrants from poorer countries choose more foreign names upon first arrival in both periods but are among the fastest to shift toward native-sounding names. We find substantial cultural assimilation for immigrants of all education levels.
{"title":"Do Immigrants Assimilate More Slowly Today than in the Past?","authors":"Ran Abramitzky, Leah Boustan, Katherine Eriksson","doi":"10.1257/aeri.20190079","DOIUrl":"10.1257/aeri.20190079","url":null,"abstract":"<p><p>Using millions of historical census records and modern birth certificates, we document that immigrants assimilated into US society at similar rates in the past and present. We measure cultural assimilation as immigrants giving their children less foreign names after spending more time in the United States, and show that immigrants erase about one-half of the naming gap with natives after 20 years both historically and today. Immigrants from poorer countries choose more foreign names upon first arrival in both periods but are among the fastest to shift toward native-sounding names. We find substantial cultural assimilation for immigrants of all education levels.</p>","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":"2 1","pages":"125-141"},"PeriodicalIF":8.5,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7508458/pdf/nihms-1585711.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"38412338","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper establishes a tight relation between nonstandard behaviors in the domains of risk and time, by considering a decision-maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present bias, and between the common ratio effect and temporal reversals. (JEL D11, D15, D81, D91)
{"title":"The Relation between Behavior under Risk and over Time","authors":"Anujit Chakraborty, Yoram Halevy, Kota Saito","doi":"10.1257/AERI.20190051","DOIUrl":"https://doi.org/10.1257/AERI.20190051","url":null,"abstract":"The paper establishes a tight relation between nonstandard behaviors in the domains of risk and time, by considering a decision-maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present bias, and between the common ratio effect and temporal reversals. (JEL D11, D15, D81, D91)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1257/AERI.20190051","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46470313","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We propose a stock market-based measure to capture initial beliefs about an event’s effect on firm profits, which may be used to measure whether initial expectations are subsequently realized. Our “Event Long-Short Index” is the difference in market-capitalization-weighted returns of firms that outperform versus underperform the market on the event date. We use post-event index returns to measure whether initial beliefs are reinforced or attenuated. We apply our approach to the 2016 US presidential election and Brexit referendum to illustrate the index and its interpretation and to validate it, showing that it moves as expected following subsequent political and business news. (JEL D22, D72, D83, G14, L25)
{"title":"An Event Long-Short Index: Theory and Applications","authors":"R. Fisman, Eric Zitzewitz","doi":"10.1257/aeri.20180399","DOIUrl":"https://doi.org/10.1257/aeri.20180399","url":null,"abstract":"We propose a stock market-based measure to capture initial beliefs about an event’s effect on firm profits, which may be used to measure whether initial expectations are subsequently realized. Our “Event Long-Short Index” is the difference in market-capitalization-weighted returns of firms that outperform versus underperform the market on the event date. We use post-event index returns to measure whether initial beliefs are reinforced or attenuated. We apply our approach to the 2016 US presidential election and Brexit referendum to illustrate the index and its interpretation and to validate it, showing that it moves as expected following subsequent political and business news. (JEL D22, D72, D83, G14, L25)","PeriodicalId":29954,"journal":{"name":"American Economic Review-Insights","volume":" ","pages":""},"PeriodicalIF":8.5,"publicationDate":"2019-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1257/aeri.20180399","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42909884","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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