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Articles 61 - 90 of 2930
Full-Text Articles in Social and Behavioral Sciences
Human Capital And Development, Philippe Aghion, Ingvild Almås, Costas Meghir
Human Capital And Development, Philippe Aghion, Ingvild Almås, Costas Meghir
Cowles Foundation Discussion Papers
Human capital is central to efforts to promote growth, convergence, and the elimination of poverty. Drawing on seminal macroeconomic frameworks by Nelson-Phelps, Lucas, and subsequent developments, alongside macro and microeconomic evidence, the chapter examines the role of human capital in driving innovation and growth, emphasizing how different types of human capital matter at different stages of development, and discussing obstacles to accumulation and evidence from policy interventions.
Wedges: A Microeconomic Perspective On Misallocation, Lauren Falcao Bergquist, Daniel Lashkari, Eric Verhoogen
Wedges: A Microeconomic Perspective On Misallocation, Lauren Falcao Bergquist, Daniel Lashkari, Eric Verhoogen
Cowles Foundation Discussion Papers
This chapter, prepared for the Handbook of Development Economics (Vol. 6), reviews recent microeconomic evidence on the causes of resource misallocation in developing countries. It distinguishes between “technological” and “distortionary” wedges, develops a unified theoretical framework linking market power, taxes, financial frictions, and firm dynamics, and summarizes empirical findings from the “direct approach” to misallocation. The authors emphasize how wedges vary by firm size and discuss policy implications for improving allocative efficiency.
Information Design And Mechanism Design: An Integrated Framework, Dirk Bergemann, Tibor Heumann, Stephen Morris
Information Design And Mechanism Design: An Integrated Framework, Dirk Bergemann, Tibor Heumann, Stephen Morris
Cowles Foundation Discussion Papers
We develop an integrated framework for information design and mechanism design in screening environments with quasilinear utility. Using the tools of majorization theory and quantile functions, we show that both information design and mechanism design problems reduce to maximizing linear functionals subject to majorization constraints. For mechanism design, the designer chooses allocations weakly majorized by the exogenous inventory. For information design, the designer chooses information structures that are majorized by the prior distribution. When the designer can choose both the mechanism and the information structure simultaneously, then the joint optimization problem becomes bilinear with two majorization constraints. We show that …
Extreme Points And Majorization, Andreas Kleiner, Benny Moldovanu, Philipp Strack
Extreme Points And Majorization, Andreas Kleiner, Benny Moldovanu, Philipp Strack
Cowles Foundation Discussion Papers
Many seemingly different economic problems share a common mathematical structure: they involve the maximization of a functional over sets of monotonic functions that are either majorized by, or majorize, a given function. This paper presents new, simpler proofs for the main characterization results of the extreme points of sets defined by monotonicity and majorization constraints obtained by Kleiner, Moldovanu, and Strack (2021). It demonstrates how these characterizations can be applied to a broad range of economic applications, including auction and information design, contest design, optimal delegation, optimal stopping, and decision problems under risk. The paper concludes with an overview of …
Employment Preferences Of Favela Residents, Mayara Felix, Beatriz Marcoje, Ieda Matavelli, Maria Clara Rodrigues
Employment Preferences Of Favela Residents, Mayara Felix, Beatriz Marcoje, Ieda Matavelli, Maria Clara Rodrigues
Cowles Foundation Discussion Papers
We document employment preferences of workers at the margin of informality using open-ended questions and discrete choice experiments in Brazil’s largest favela complex. Stated preferences emphasize pay and tangible job benefits rather than meaning or purpose, while primary complaints center on poor management, customers, and inflexible schedules. Workers exhibit high valuations for all formal sector amenities on average—unemployment insurance, parental leave, and termination notice—as well as for learning opportunities, but lower for non-formal sector amenities such as shorter commutes. Valuations vary systematically by employment sector in ways consistent with sorting: formal workers value formal amenities most, the self-employed value them …
The Trade-Off Between Quality And Quantity: Evidence From A Field Experiment On Tutoring, Rohen Shaw
The Trade-Off Between Quality And Quantity: Evidence From A Field Experiment On Tutoring, Rohen Shaw
Cowles Foundation Discussion Papers
High-dosage tutoring has the potential to substantially raise adolescent academic achievement, but schools may lack the resources to deliver small-group tutoring frequently at scale. This paper studies the relative importance of tutoring group size (quality) versus tutoring frequency (quantity) using a randomized controlled trial in a Midwestern U.S. charter middle school. Students were randomized to a control group, tutoring twice a week in 2-student groups, or tutoring three times a week in 3-student groups, with equal total cost per student across the two treatment arms. The results show that tutoring in 2-student groups led to a statistically significant improvement in …
The First 1000 Days And Beyond: The Process Of Child Development, Orazio Attanasio
The First 1000 Days And Beyond: The Process Of Child Development, Orazio Attanasio
Cowles Foundation Discussion Papers
This paper reviews recent developments in the economics of human development, focusing on the early years of life as a critical period for shaping long-term outcomes. Early childhood development is inherently multidimensional: cognitive and socioemotional skills evolve dynamically and interact with health, nutrition, and environmental influences. Economists have contributed to this field by providing a conceptual unifying framework that highlights how key drivers of development reflect the choices of individuals operating under incentives and constraints. Within this framework, the paper emphasizes two central challenges: understanding the interactions among multiple dimensions of development and identifying causal links—particularly the effects of different …
Replacement And Reputation, Navin Kartik, Elliot Lipnowski, Harry Pei
Replacement And Reputation, Navin Kartik, Elliot Lipnowski, Harry Pei
Cowles Foundation Discussion Papers
Does electoral replacement ensure that officeholders eventually act in voters’ interests? We study a reputational model of accountability. Voters observe incumbents’ performance and decide whether to replace them. Politicians may be “good” types who always exert effort or opportunists who may shirk. We find that good long-run outcomes are always attainable, though the mechanism and its robustness depend on economic conditions. In environments conducive to incentive provision, some equilibria feature sustained effort, yet others exhibit some long-run shirking. In the complementary case, opportunists are never fully disciplined, but selection dominates: every equilibrium eventually settles on a good politician, yielding permanent …
Procurement Without Priors: A Simple Mechanism And Its Notable Performance, Dirk Bergemann, Tibor Heumann, Stephen Morris
Procurement Without Priors: A Simple Mechanism And Its Notable Performance, Dirk Bergemann, Tibor Heumann, Stephen Morris
Cowles Foundation Discussion Papers
How should a buyer design procurement mechanisms when suppliers’ costs are unknown, and the buyer does not have a prior belief? We demonstrate that notably simple mechanisms—those that share a constant fraction of the buyer utility with the seller—allow the buyer to realize a guaranteed positive fraction of the efficient social surplus across all possible costs. Moreover, a judicious choice of the share based on the known demand maximizes the surplus ratio guarantee that can be attained across all possible (arbitrarily complex and nonlinear) mechanisms and cost functions. Results apply to related nonlinear pricing and optimal regulation problems.
Data-Driven Mechanism Design: Jointly Eliciting Preferences And Information, Dirk Bergemann, Marek Bojko, Paul Dutting, Renato Paes Leme, Haifeng Xu, Song Zuo
Data-Driven Mechanism Design: Jointly Eliciting Preferences And Information, Dirk Bergemann, Marek Bojko, Paul Dutting, Renato Paes Leme, Haifeng Xu, Song Zuo
Cowles Foundation Discussion Papers
We study mechanism design in environments where agents have private preferences and private information about a common payoff-relevant state. In such settings with multi-dimensional types, standard mechanisms fail to implement efficient allocations. We address this limitation by proposing data-driven mechanisms that condition transfers on additional post-allocation information, modeled as an estimator of the payoff-relevant state. Our mechanisms extend the classic Vickrey–Clarke–Groves framework. We show they achieve exact implementation in posterior equilibrium when the state is fully revealed or utilities are affine in an unbiased estimator. With a consistent estimator, they achieve approximate implementation that converges to exact implementation as the …
Multidimensional Sorting: Comparative Statics, Joe Boerma, Andrea Ottolini, Aleh Tsyvinski
Multidimensional Sorting: Comparative Statics, Joe Boerma, Andrea Ottolini, Aleh Tsyvinski
Cowles Foundation Discussion Papers
In sorting literature, comparative statics for multidimensional assignment models with general output functions and input distributions is an important open question. We provide a complete theory of comparative statics for technological change in general multidimensional assignment models. Our main result is that any technological change is uniquely decomposed into two distinct components. The first component (gradient) gives a characterization of changes in marginal earnings through a Poisson equation. The second component (divergence-free) gives a characterization of labor reallocation. For U.S. data, we quantify equilibrium responses in sorting and earnings with respect to cognitive skill-biased technological change.
Drivers Of Racial Differences In C-Sections, Adriana Corredor-Waldron, Janet Currie, Molly Schnell
Drivers Of Racial Differences In C-Sections, Adriana Corredor-Waldron, Janet Currie, Molly Schnell
Cowles Foundation Discussion Papers
Black mothers with a trial of labor are 25 percent more likely to deliver by C-section than non-Hispanic White mothers. The gap is largest among mothers with the lowest risk and is reduced by only one-fifth when controlling for observed medical risk factors, sociodemographic characteristics, hospital, and physician or medical practice group. Remarkably, the gap disappears when performing a C-section is more costly due to a concurrent pre-labor C-section limiting surgical resources. This finding is consistent with provider discretion—rather than differences in unobserved medical risk—accounting for persistent racial disparities in delivery method. The additional intrapartum C-sections that occur among low-risk …
Information Without Rents: Mechanism Design Without Expected Utility, Ernesto Rivera Mora, Philipp Strack
Information Without Rents: Mechanism Design Without Expected Utility, Ernesto Rivera Mora, Philipp Strack
Cowles Foundation Discussion Papers
We study mechanism design for a sophisticated agent with non-expected utility (EU) preferences. We show that the revelation principle holds if and only if all types are EU maximizers: if at least one type is a non-EU maximizer, randomizing over dynamic mechanisms generates a strictly larger set of implementable allocations than using static mechanisms. Moreover, dynamic stochastic mechanisms can fully extract the private information of any type who doesn’t have uniformly quasi-concave preferences without providing that type any rent. Full-surplus extraction is possible in a broad variety of non-EU environments, but impossible for types with concave preferences.
Regulating Privacy Policies On Digital Platforms, Michele Bisceglia, Alessandro Bonatti, Fiona Scott Morton
Regulating Privacy Policies On Digital Platforms, Michele Bisceglia, Alessandro Bonatti, Fiona Scott Morton
Cowles Foundation Discussion Papers
We study how privacy regulation affects menu pricing by a monopolist platform that collects and monetizes personal data. Consumers differ in privacy valuation and sophistication: naive users ignore privacy losses, while sophisticated users internalize them. The platform designs prices and data collection options to screen users. Without regulation, privacy allocations are distorted and naive users are exploited. Regulation through privacy-protecting defaults can create a market for information by inducing payments for data; hard caps on data collection protect naive users but may restrict efficient data trade.
Probability Pricing, Eduardo Dávila, Cecilia Parlatore, Ansgar Walther
Probability Pricing, Eduardo Dávila, Cecilia Parlatore, Ansgar Walther
Cowles Foundation Discussion Papers
This paper develops probability pricing, extending cash flow pricing to quantify the willingnessto-pay for changes in probabilities. We show that the value of any marginal change in probabilities can be expressed as a standard asset-pricing formula with hypothetical cash flows derived from changes in the survival function. This equivalence between probability and cash flow valuation allows us to construct hedging strategies and systematically decompose individual and aggregate willingness-to-pay. Four applications examine the valuation of changes in the distribution of aggregate consumption, the efficiency effects of varying performance precision in principal-agent problems, and the welfare implications of public and private information.
Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena
Marriage, Labor Supply And The Dynamics Of The Social Safety Net, Hamish Low, Costas Meghir, Luigi Pistaferri, Alessandra Voena
Cowles Foundation Discussion Papers
The 1996 US welfare reform introduced time limits on welfare receipt. We use quasi-experimental evidence and a rich life-cycle model to understand the impact of time limits on different margins of behavior and well-being. We stress the impact of marital status and marital transitions on mitigating the cost and impact of time limits. Time limits cause women to defer claiming in anticipation of future needs and to work more, effects that depend on the probabilities of marriage and divorce. They also cause an increase in employment among single mothers and reduce divorce, but their introduction costs women 0.7% of lifetime …
Relu-Based And Dnn-Based Generalized Maximum Score Estimators, Xiaohong Chen, Wayne Yuan Gao, Likand Wen
Relu-Based And Dnn-Based Generalized Maximum Score Estimators, Xiaohong Chen, Wayne Yuan Gao, Likand Wen
Cowles Foundation Discussion Papers
We propose a new formulation of the maximum score estimator that uses compositions of rectified linear unit (ReLU) functions, instead of indicator functions as in Manski (1975, 1985), to encode the sign alignment restrictions. Since the ReLU function is Lipschitz, our new ReLU-based maximum score criterion function is substantially easier to optimize using standard gradient-based optimization pacakges. We also show that our ReLU-based maximum score (RMS) estimator can be generalized to an umbrella framework defined by multi-index single-crossing (MISC) conditions, while the original maximum score estimator cannot be applied. We establish the n −s/(2s+1) convergence rate and asymptotic normality for …
New Measures For Richer Theories: Some Thoughts And An Example, Orazio Attanasio, Victor Sancibrian, Federica Ambrosio
New Measures For Richer Theories: Some Thoughts And An Example, Orazio Attanasio, Victor Sancibrian, Federica Ambrosio
Cowles Foundation Discussion Papers
For a long time, the majority of economists doing empirical work relied on choice data, while data based on answers to hypothetical questions, stated preferences or measures of subjective beliefs were met with some skepticism. Although this has changed recently, much work needs to be done. In this paper, we emphasize the identifying content of new economic measures. In the first part of the paper, we discuss where the literature on measures in economics stands at the moment. We first consider how the design and use of new measures can help identify causal links and structural parameters under weaker assumptions …
Optimization Via Strategic Law Of Large Numbers, Xiaohong Chen, Zengjing Chen, Wayne Yuan Gao, Xiaodong Yan, Guodong Zhang
Optimization Via Strategic Law Of Large Numbers, Xiaohong Chen, Zengjing Chen, Wayne Yuan Gao, Xiaodong Yan, Guodong Zhang
Cowles Foundation Discussion Papers
This paper proposes a novel framework for the global optimization of a continuous function in a bounded rectangular domain. Specifically, we show that: (1) global optimization is equivalent to optimal strategy formation in a two-armed decision problem with known distributions, based on the Strategic Law of Large Numbers we establish; and (2) a sign-based strategy based on the solution of a parabolic PDE is asymptotically optimal. Motivated by this result, we propose a class of Strategic Monte Carlo Optimization (SMCO) algorithms, which uses a simple strategy that makes coordinate-wise two-armed decisions based on the signs of …
Worker Rights In Collective Bargaining, Benjamin W. Arold, Elliott Ash, W. Bentley Macleod, Suresh Naidu
Worker Rights In Collective Bargaining, Benjamin W. Arold, Elliott Ash, W. Bentley Macleod, Suresh Naidu
Cowles Foundation Discussion Papers
Collective bargaining agreements (CBAs) specify the contractual rights of unionized workers, but their full legal content has not yet been analyzed by economists. This paper develops novel natural language methods to analyze the empirical determinants and economic value of these rights using a new collection of 30,000 CBAs from Canada in the period 1986-2015. We parse legally binding rights (e.g., “workers shall receive. . . ”) and obligations (e.g., “the employer shall provide. . . ”) from contract text, and validate our measures through evaluation of clause pairs and comparison to firm surveys on HR practices. Using timevarying province-level variation …
Slim: Stochastic Learning And Inference In Overidentified Models, Xiaohong Chen, Min Seong Kim, Sokbae Lee, Myung Hwan Seo, Myunghyun Song
Slim: Stochastic Learning And Inference In Overidentified Models, Xiaohong Chen, Min Seong Kim, Sokbae Lee, Myung Hwan Seo, Myunghyun Song
Cowles Foundation Discussion Papers
We propose SLIM (Stochastic Learning and Inference in overidentified Models), a scalable stochastic approximation framework for nonlinear GMM. SLIM forms iterative updates from independent mini-batches of moments and their derivatives, producing unbiased directions that ensure almost-sure convergence. It requires neither a consistent initial estimator nor global convexity and accommodates both fixed-sample and random-sampling asymptotics. We further develop an optional second-order refinement and inference procedures based on random scaling and plug-in methods, including plug-in, debiased plug-in, and online versions of the Sargan–Hansen J-test tailored to stochastic learning. In Monte Carlo experiments based on a nonlinear EASI demand system with 576 moment …
Local Overidentification And Efficiency Gains In Modern Causal Inference And Data Combination, Xiaohong Chen, Haitian Xie
Local Overidentification And Efficiency Gains In Modern Causal Inference And Data Combination, Xiaohong Chen, Haitian Xie
Cowles Foundation Discussion Papers
This paper studies nonparametric local (over-)identification, in the sense of Chen and Santos (2018), and the associated semiparametric efficiency in modern causal frameworks. We develop a unified approach that begins by translating structural models with latent variables into their induced statistical models of observables and then analyzes local overidentification through conditional moment restrictions. We apply this approach to three leading models: (i) the general treatment model under unconfoundedness, (ii) the negative control model, and (iii) the long-term causal inference model under unobserved confounding. The first design yields a locally just-identified statistical model, implying that all regular asymptotically linear estimators of …
Safely Exploring Novel Actions In Recommender Systems Via Deployment-Efficient Policy Learning, Haruka Kiyohara, Yusuke Narita, Yuta Saito, Kei Tateno, Takuma Udagawa
Safely Exploring Novel Actions In Recommender Systems Via Deployment-Efficient Policy Learning, Haruka Kiyohara, Yusuke Narita, Yuta Saito, Kei Tateno, Takuma Udagawa
Cowles Foundation Discussion Papers
In many real recommender systems, novel items are added frequently over time. The importance of sufficiently presenting novel actions has widely been acknowledged for improving long-term user engagement. A recent work builds on Off-Policy Learning (OPL), which trains a policy from only logged data, however, the existing methods can be unsafe in the presence of novel actions. Our goal is to develop a framework to enforce exploration of novel actions with a guarantee for safety. To this end, we first develop Safe Off-Policy Policy Gradient (Safe OPG), which is a model-free safe OPL method based on a high confidence off-policy …
Disclosure And The Pace Of Drug Development, Colleen Cunnningham, Florian Ederer, Charles Hodgson, Zhichun Wang
Disclosure And The Pace Of Drug Development, Colleen Cunnningham, Florian Ederer, Charles Hodgson, Zhichun Wang
Cowles Foundation Discussion Papers
Policies that mandate disclosure of innovative project outcomes aim to increase innovation by limiting wasteful duplicative innovation. Yet, such policies change not only the ex-post information environment but also firms' ex-ante innovation incentives. Firms may slow down their own innovation efforts in anticipation of increased disclosure by others. We examine the innovation-related impacts of the 2017 FDA Final Rule amendment, which mandates disclosure of clinical trial results for pharmaceutical firms. We show that the policy hastened and increased disclosure of results for clinical trials post-completion, but also increased the time to completion of clinical trials, the time between early phases …
Edgeworth Expansions In Curved Cross Section Autoregression, Peter C.B. Phillips
Edgeworth Expansions In Curved Cross Section Autoregression, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Edgeworth expansions are developed for the finite sample distribution of the least squares estimator in a time series parametric first order autoregression with Hilbert space curves of cross section data. The main result extends to this functional data environment the Edgeworth expansion in the corresponding scalar time series AR(1). In doing so, the results show how function-valued cross section data, and hence general forms of cross section dependence, affect the finite sample distribution of the serial correlation coefficient. Autoregressions with functional fixed effect intercepts are included and the results therefore relate to dynamic panel autoregression with individual effects. The primary …
What Can Trends In Emergency Department Visits Tell Us About Child Mental Health?, Han Choi, Adriana Corredor-Waldron, Janet Currie, Chris Felton
What Can Trends In Emergency Department Visits Tell Us About Child Mental Health?, Han Choi, Adriana Corredor-Waldron, Janet Currie, Chris Felton
Cowles Foundation Discussion Papers
Increases in mental health diagnoses and suicidal behaviors in Emergency Departments are often cited as evidence of an accelerating child mental health crisis. We ask whether trends in ED visits provide an accurate picture of changes in U.S. child mental health. These measures have been profoundly affected by changing conventions about screening, defining, and coding of mental illness. We conclude that child mental health has been deteriorating, but not by the startling magnitudes suggested by jumps and trends in some measures such as suicidal ideation. Although reported suicidal behaviors rose 228% from 2006–2021, the true rise in mental health disorders …
Optimal Estimation In A Multicointegrated System, Igor Kheifets, Peter C.B. Phillips
Optimal Estimation In A Multicointegrated System, Igor Kheifets, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Optimal estimation is explored in long run relations that are modeled within a semiparametric triangular multicointegrated system. In nonsingular cointegrated systems, where there is no multicointegration, optimal estimation is well understood (Phillips, 1991a). This paper establishes corresponding optimal results for singular systems, thereby accommodating a wide class of multicointegrated nonstationary time series with nonparametric transient dynamics. The optimality and sub-optimality of existing estimators are considered and new optimal estimators of both the cointegrating and multicointegrating coefficients are introduced that are based on spectral regression.
The Changing Nature Of International Trade And Its Implications For Development, Pinelopi Goldberg, Michele Ruta
The Changing Nature Of International Trade And Its Implications For Development, Pinelopi Goldberg, Michele Ruta
Cowles Foundation Discussion Papers
This chapter revisits the relationship between international trade, trade policy, and development in light of the structural, policy, and geopolitical shifts that have transformed globalization over the past decade. While trade has historically supported development through both static and dynamic channels, we argue that the latter—those inducing structural transformation and institutional change—have been far more consequential for long-run development. Through access to global markets, participation in global value chains, and knowledge and technology transfers, and by providing an anchor for reform, trade and trade agreements have contributed to productivity gains, technological progress, quality and skill upgrading, and institutional change in …
Large-Scale Curve Time Series With Common Stochastic Trends, Degui Li, Yuning Li, Peter C. B. Phillips
Large-Scale Curve Time Series With Common Stochastic Trends, Degui Li, Yuning Li, Peter C. B. Phillips
Cowles Foundation Discussion Papers
This paper studies high-dimensional curve time series with common stochastic trends. A dual functional factor model structure is adopted with a high-dimensional factor model for the observed curve time series and a low-dimensional factor model for the latent curves with common trends. A functional PCA technique is applied to estimate the common stochastic trends and functional factor loadings. Under some regularity conditions we derive the mean square convergence and limit distribution theory for the developed estimates, allowing the dimension and sample size to jointly diverge to infinity. We propose an easy-to-implement criterion to consistently select the number of common stochastic …
Growth With Firm-To-Firm Trade, Samuel Kortum, Bernardo Ribeiro
Growth With Firm-To-Firm Trade, Samuel Kortum, Bernardo Ribeiro
Cowles Foundation Discussion Papers
We explore how connections between buyers and suppliers of intermediate inputs evolve over time to promote firm growth. To formalize this process we develop a dynamic model of a granular endogenous production network, making stark assumptions that yield a tractable parsimonious framework. In the model, producers gradually build up a network of contacts by meeting other producers and source an intermediate input from their cheapest contact at any moment. They retain full recall, so can always switch to a producer contacted previously, even if they never bought from it before. Through this process the production network itself becomes an endogenous …