Open Access. Powered by Scholars. Published by Universities.®
Social and Behavioral Sciences Commons™
Open Access. Powered by Scholars. Published by Universities.®
- Keyword
-
- Mechanism design (36)
- Asymptotic size (27)
- Bayes correlated equilibrium (25)
- Climate change (25)
- Incomplete information (25)
-
- Unit root (25)
- Adverse selection (24)
- Cointegration (24)
- Information structure (24)
- Test (24)
- N/A (23)
- Identification (22)
- Asymptotics (21)
- Default (21)
- Moment inequalities (21)
- Nonstationarity (21)
- Productivity (21)
- Confidence set (20)
- Robustness (20)
- Asymptotic theory (19)
- Autoregression (19)
- Common knowledge (18)
- Game theory (18)
- Innovation (18)
- Moral hazard (18)
- Weak instruments (18)
- Brownian motion (17)
- Correlated equilibrium (17)
- General equilibrium (17)
- Long memory (17)
- Publication Year
Articles 601 - 630 of 2930
Full-Text Articles in Social and Behavioral Sciences
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
Cowles Foundation Discussion Papers
We study the classic sequential screening problem in the presence of ex-post participation constraints. We establish necessary and sufficient conditions that determine exhaustively when the optimal selling mechanism is either static or sequential. In the static contract, the buyers are not screened with respect to their interim type and the object is sold at a posted price. In the sequential contract, the buyers are screened with respect to their interim type and a menu of quantities is offered. We completely characterize the optimal sequential contract with binary interim types and a continuum of ex-post values. Importantly, the optimal sequential contract …
Zone Pricing In Retail Oligopoly, Brian Adams, Kevin R. Williams
Zone Pricing In Retail Oligopoly, Brian Adams, Kevin R. Williams
Cowles Foundation Discussion Papers
We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe’s would prefer coarser pricing. The use of zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in markets where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer pricing …
Behavioral Characterizations Of Naiveté For Time-Inconsistent Preferences, David S. Ahn, Ryota Iijima, Yves Le Yaouanq, Todd Sarver
Behavioral Characterizations Of Naiveté For Time-Inconsistent Preferences, David S. Ahn, Ryota Iijima, Yves Le Yaouanq, Todd Sarver
Cowles Foundation Discussion Papers
We propose nonparametric definitions of absolute and comparative naivete. These definitions leverage ex-ante choice of menu to identify predictions of future behavior and ex-post (random) choices from menus to identify actual behavior. The main advantage of our definitions is their independence from any assumed functional form for the utility function representing behavior. An individual is sophisticated if she is indifferent between choosing from a menu ex-post or committing to the actual distribution of choices from that menu ex-ante. She is naive if she prefers the flexibility in the menu, reflecting a mistaken belief that she will act more virtuously than …
Behavioral Characterizations Of Naiveté For Time-Inconsistent Preferences, David S. Ahn, Ryota Iijima, Yves Le Yaouanq, Todd Sarver
Behavioral Characterizations Of Naiveté For Time-Inconsistent Preferences, David S. Ahn, Ryota Iijima, Yves Le Yaouanq, Todd Sarver
Cowles Foundation Discussion Papers
We propose nonparametric definitions of absolute and comparative naivete. These definitions leverage ex-ante choice of menu to identify predictions of future behavior and ex-post (random) choices from menus to identify actual behavior. The main advantage of our definitions is their independence from any assumed functional form for the utility function representing behavior. An individual is sophisticated if she is indifferent ex-ante between retaining the option to choose from a menu ex-post or committing to her actual distribution of choices from that menu. She is naive if she prefers the flexibility in the menu, reflecting a mistaken belief that she will …
Information Design: A Unified Perspective, Dirk Bergemann, Stephen Morris
Information Design: A Unified Perspective, Dirk Bergemann, Stephen Morris
Cowles Foundation Discussion Papers
Fixing a game with uncertain payoffs, information design identi.es the information structure and equilibrium that maximizes the payoff of an information designer. We show how this perspective unifies existing work, including that on communication in games (Myerson (1991)), Bayesian persuasion (Kamenica and Gentzkow (2011)) and some of our own recent work. Information design has a literal interpretation, under which there is a real information designer who can commit to the choice of the best information structure (from her perspective) for a set of participants in a game. We emphasize a metaphorical interpretation, under which the information design problem is used …
Information Design: A Unified Perspective, Dirk Bergemann, Stephen Morris
Information Design: A Unified Perspective, Dirk Bergemann, Stephen Morris
Cowles Foundation Discussion Papers
Given a game with uncertain payoffs, information design analyzes the extent to which the provision of information alone can influence the behavior of the players. Information design has a literal interpretation, under which there is a real information designer who can commit to the choice of the best information structure (from her perspective) for a set of participants in a game. We emphasize a metaphorical interpretation, under which the information design problem is used by the analyst to characterize play in the game under many different information structures. We provide an introduction into the basic issues and insights of a …
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
Cowles Foundation Discussion Papers
We study the classic sequential screening problem under ex-post participation constraints. Thus the seller is required to satisfy buyers’ ex-post participation constraints. A leading example is the online display advertising market, in which publishers frequently cannot use up-front fees and instead use transaction-contingent fees. We establish when the optimal selling mechanism is static (buyers are not screened) or dynamic (buyers are screened), and obtain a full characterization of such contracts. We begin by analyzing our model within the leading case of exponential distributions with two types. We provide a necessary and sufficient condition for the optimality of the static contract. …
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
Cowles Foundation Discussion Papers
We study the classic sequential screening problem under ex-post participation constraints. Thus the seller is required to satisfy buyers’ ex-post participation constraints. A leading example is the online display advertising market, in which publishers frequently cannot use up-front fees and instead use transaction-contingent fees. We establish when the optimal selling mechanism is static (buyers are not screened) or dynamic (buyers are screened), and obtain a full characterization of such contracts. We begin by analyzing our model within the leading case of exponential distributions with two types. We provide a necessary and sufficient condition for the optimality of the static contract. …
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
Cowles Foundation Discussion Papers
We study the classic sequential screening problem in the presence of buyers’ ex-post participation constraints. A leading example is the online display advertising market, in which publishers frequently do not use up-front fees and instead use transaction-contingent fees. We establish conditions under which the optimal selling mechanism is static and buyers are not screened with respect to their interim type, or sequential and the buyers are screened with respect to their interim type. In particular, we provide an intuitive necessary and sufficient condition under which the static contract is optimal for general distributions of ex-post values. Further, we completely characterize …
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
The Scope Of Sequential Screening With Ex-Post Participation Constraints, Dirk Bergemann, Francisco Castro, Gabriel Weintraub
Cowles Foundation Discussion Papers
We study the classic sequential screening problem in the presence of ex-post participation constraints. We establish necessary and sufficient conditions that determine when the optimal selling mechanism is either static or sequential. In the static contract, the buyers are not screened with respect to their interim type and the object is sold at a posted price. In the sequential contract, the buyers are screened with respect to their interim type and a menu of quantities is offered. We completely characterize the optimal sequential contract with binary interim types and a continuum of ex-post values. Importantly, the optimal sequential contract randomizes …
Zone Pricing In Retail Oligopoly, Brian Adams, Kevin R. Williams
Zone Pricing In Retail Oligopoly, Brian Adams, Kevin R. Williams
Cowles Foundation Discussion Papers
We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe’s would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in rural markets, where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer price discrimination does.
Zone Pricing In Retail Oligopoly, Brian Adams, Kevin R. Williams
Zone Pricing In Retail Oligopoly, Brian Adams, Kevin R. Williams
Cowles Foundation Discussion Papers
We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home improvement industry, we find that Home Depot would benefit from finer pricing but that Lowe’s would prefer coarser pricing. Zone pricing softens competition in markets where firms compete, but it shields consumers from higher prices in markets where firms might otherwise exercise market power. Overall, zone pricing produces higher consumer surplus than finer pricing discrimination does.
Narrative Economics, Robert J. Shiller
Narrative Economics, Robert J. Shiller
Cowles Foundation Discussion Papers
This address considers the epidemiology of narratives relevant to economic fluctuations. The human brain has always been highly tuned towards narratives, whether factual or not, to justify ongoing actions, even such basic actions as spending and investing. Stories motivate and connect activities to deeply felt values and needs. Narratives “go viral” and spread far, even worldwide, with economic impact. The 1920-21 Depression, the Great Depression of the 1930s, the so-called “Great Recession” of 2007-9 and the contentious political-economic situation of today, are considered as the results of the popular narratives of their respective times. Though these narratives are deeply human …
Consequences Of The Clean Water Act And The Demand For Water Quality, David A. Keiser, Joseph S. Shapiro
Consequences Of The Clean Water Act And The Demand For Water Quality, David A. Keiser, Joseph S. Shapiro
Cowles Foundation Discussion Papers
Since the 1972 U.S. Clean Water Act, government and industry have invested over $1 trillion to abate water pollution, or $100 per person-year. Over half of U.S. stream and river miles, however, still violate pollution standards. We use the most comprehensive set of files ever compiled on water pollution and its determinants, including 50 million pollution readings from 170,000 monitoring sites, to study water pollution’s trends, causes, and welfare consequences. We have three main findings. First, water pollution concentrations have fallen substantially since 1972, though were declining at faster rates before then. Second, the Clean Water Act’s grants to municipal …
The Benefit Of Collective Reputation, Zvika Neeman, Aniko Öry (Oery), Jungju Yu
The Benefit Of Collective Reputation, Zvika Neeman, Aniko Öry (Oery), Jungju Yu
Cowles Foundation Discussion Papers
We study a model of collective reputation and use it to analyze the benefit of collective brands. Consumers form beliefs about the quality of an experience good that is produced by one firm that is part of a collective brand. Consumers’ limited ability to distinguish among firms in the collective and to monitor firms’ investment decisions creates incentives to free-ride on other firms’ investment efforts. Nevertheless, we show that collective brands induce stronger incentives to invest in quality than individual brands under two types of circumstances: if the main concern is with quality control and the baseline reputation of the …
Consequences Of The Clean Water Act And The Demand For Water Quality, David A. Keiser, Joseph S. Shapiro
Consequences Of The Clean Water Act And The Demand For Water Quality, David A. Keiser, Joseph S. Shapiro
Cowles Foundation Discussion Papers
Since the 1972 U.S. Clean Water Act, government and industry have invested over $1 trillion to abate water pollution, or $100 per person-year. Over half of U.S. stream and river miles, however, still violate pollution standards. We use the most comprehensive set of files ever compiled on water pollution and its determinants, including 50 million pollution readings from 240,000 monitoring sites and a network model of all U.S. rivers, to study water pollution’s trends, causes, and welfare consequences. We have three main findings. First, water pollution concentrations have fallen substantially. Between 1972 and 2001, for example, the share of waters …
Weak Σ- Convergence: Theory And Applications, Jianning Kong, Peter C.B. Phillips, Donggyu Sul
Weak Σ- Convergence: Theory And Applications, Jianning Kong, Peter C.B. Phillips, Donggyu Sul
Cowles Foundation Discussion Papers
The concept of relative convergence, which requires the ratio of two time series to converge to unity in the long run, explains convergent behavior when series share commonly divergent stochastic or deterministic trend components. Relative convergence of this type does not necessarily hold when series share common time decay patterns measured by evaporating rather than divergent trend behavior. To capture convergent behavior in panel data that do not involve stochastic or divergent deterministic trends, we introduce the notion of weak σ-convergence, whereby cross section variation in the panel decreases over time. The paper formalizes this concept and proposes a simple-to-implement …
Three Essays On The Theory Of Money And Financial Institutions Essay 3: The Economy With Innovation, Externalities And Context, Martin Shubik
Three Essays On The Theory Of Money And Financial Institutions Essay 3: The Economy With Innovation, Externalities And Context, Martin Shubik
Cowles Foundation Discussion Papers
This essay is the third of three. The first is nontechnical and in part autobiograhpical describing the evolution of my approach to developing a microeconomic theory of money and.financial institutions. The second essay was devoted to a more formal sketch of a closed economic exchange system with no other externalities beyond money and markets. This essay builds on the existence of monetary exchange but also context, and active government with nonsymmetric information and many externaties indicate that the views of Keynes, Hayek and Schumpeter are all consistent with the next stages of complexity as the logic requires many different arrays …
The Benefit Of Collective Reputation, Zvika Neeman, Aniko Öry (Oery), Jungju Yu
The Benefit Of Collective Reputation, Zvika Neeman, Aniko Öry (Oery), Jungju Yu
Cowles Foundation Discussion Papers
We study a model of reputation with two long-lived firms that sell their products under a collective brand or under two different individual brands. Firms face a moral hazard problem because their quality investments are not observed. Investments can only be sustained due to reputational concerns. In a collective brand, consumers cannot distinguish between the two firms. We show that in the long run, this makes it harder to establish a good reputation because of the incentives to free-ride on the other firm’s investments. But in the short run it mitigates the temptation to milk good reputation. Consequently, a collective …
Uniform Inference In Panel Autoregression, John C. Chao, Peter C.B. Phillips
Uniform Inference In Panel Autoregression, John C. Chao, Peter C.B. Phillips
Cowles Foundation Discussion Papers
This paper considers estimation and inference concerning the autoregressive coefficient (ρ) in a panel autoregression for which the degree of persistence in the time dimension is unknown. The main objective is to construct confidence intervals for ρ that are asymptotically valid, having asymptotic coverage probability at least that of the nominal level uniformly over the parameter space. It is shown that a properly normalized statistic based on the Anderson-Hsiao IV procedure, which we call the M statistic, is uniformly convergent and can be inverted to obtain asymptotically valid interval estimates. In the unit root case confidence intervals based on this …
A Note On Optimal Inference In The Linear Iv Model, Donald W.K. Andrews, Vadim Marmer, Zhengfei Yu
A Note On Optimal Inference In The Linear Iv Model, Donald W.K. Andrews, Vadim Marmer, Zhengfei Yu
Cowles Foundation Discussion Papers
This paper considers tests and confidence sets (CS’s) concerning the coefficient on the endogenous variable in the linear IV regression model with homoskedastic normal errors and one right-hand side endogenous variable. The paper derives a finite-sample lower bound function for the probability that a CS constructed using a two-sided invariant similar test has infinite length and shows numerically that the conditional likelihood ratio (CLR) CS of Moreira (2003) is not always very close to this lower bound function. This implies that the CLR test is not always very close to the two-sided asymptotically-efficient (AE) power envelope for invariant similar tests …
Change Detection And The Causal Impact Of The Yield Curve, Stan Hurn, Peter C.B. Phillips, Shu-Ping Shi
Change Detection And The Causal Impact Of The Yield Curve, Stan Hurn, Peter C.B. Phillips, Shu-Ping Shi
Cowles Foundation Discussion Papers
Causal relationships in econometrics are typically based on the concept of predictability and are established in terms of tests for Granger causality. These causal relationships are susceptible to change, especially during times of financial turbulence, making the real-time detection of instability an important practical issue. This paper develops a test for detecting changes in causal relationships based on a recursive rolling window, which is analogous to the procedure used in recent work on financial bubble detection. The limiting distribution of the test takes a simple form under the null hypothesis and is easy to implement in conditions of homoskedasticity, conditional …
Iv And Gmm Estimation And Testing Of Multivariate Stochastic Unit Root Models, Offer Lieberman, Peter C.B. Phillips
Iv And Gmm Estimation And Testing Of Multivariate Stochastic Unit Root Models, Offer Lieberman, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Lieberman and Phillips (2016; Journal of Econometrics; LP) introduced a multivariate stochastic unit root (STUR) model, which allows for random, time varying local departures from a unit root (UR) model, where nonlinear least squares (NLLS) may be used for estimation and inference on the STUR coefficient. In a structural version of this model where the driver variables of the STUR coefficient are endogenous, the NLLS estimate of the STUR parameter is inconsistent, as are the corresponding estimates of the associated covariance parameters. This paper develops a nonlinear instrumental variable (NLIV) as well as GMM estimators of the STUR parameter which …
Selling To Intermediaries: Optimal Auction Design In A Common Value Model, Dirk Bergemann, Benjamin Brooks, Stephen Morris
Selling To Intermediaries: Optimal Auction Design In A Common Value Model, Dirk Bergemann, Benjamin Brooks, Stephen Morris
Cowles Foundation Discussion Papers
We characterize revenue maximizing auctions when the bidders are intermediaries who wish to resell the good. The bidders have differential information about their common resale opportunities: each bidder privately observes an independent draw of a resale opportunity, and the highest signal is a sufficient statistic for the value of winning the good. If the good must be sold, then the optimal mechanism is simply a posted price at which all bidders are willing to purchase the good, and all bidders are equally likely to be allocated the good, irrespective of their signals. If the seller can keep the good, then …
(Non)Randomization: A Theory Of Quasi-Experimental Evaluation Of School Quality, Yusuke Narita
(Non)Randomization: A Theory Of Quasi-Experimental Evaluation Of School Quality, Yusuke Narita
Cowles Foundation Discussion Papers
In centralized school admissions systems, rationing at oversubscribed schools often uses lotteries in addition to preferences. This partly random assignment is used by empirical researchers to identify the effect of entering a school on outcomes like test scores. This paper formally studies if the two most popular empirical research designs successfully extract a random assignment. For a class of data-generating mechanisms containing those used in practice, I show: One research design extracts a random assignment under a mechanism if and almost only if the mechanism is strategy-proof for schools. In contrast, the other research design does not necessarily extract a …
(Non)Randomization: A Theory Of Quasi-Experimental Evaluation Of School Quality, Yusuke Narita
(Non)Randomization: A Theory Of Quasi-Experimental Evaluation Of School Quality, Yusuke Narita
Cowles Foundation Discussion Papers
Many centralized school admissions systems use lotteries to ration limited seats at oversubscribed schools. The resulting random assignment is used by empirical researchers to identify the effect of entering a school on outcomes like test scores. I first find that the two most popular empirical research designs may not successfully extract a random assignment of applicants to schools. When do the research designs overcome this problem? I show the following main results for a class of data-generating mechanisms containing those used in practice: One research design extracts a random assignment under a mechanism if and practically only if the mechanism …
Projections And Uncertainties About Climate Change In An Era Of Minimal Climate Policies, William D. Nordhaus
Projections And Uncertainties About Climate Change In An Era Of Minimal Climate Policies, William D. Nordhaus
Cowles Foundation Discussion Papers
Climate change remains one of the major international environmental challenges facing nations. Yet nations have to date taken minimal policies to slow climate change. Moreover, there has been no major improvement in emissions trends as of the latest data. The current study uses the updated DICE model to present new projections and the impacts of alternative climate policies. It also presents a new set of estimates of the uncertainties about future climate change and compares the results will those of other integrated assessment models. The study confirms past estimates of likely rapid climate change over the next century if there …
Causal Change Detection In Possibly Integrated Systems: Revisiting The Money-Income Relationship, Shu-Ping Shi, Stan Hurn, Peter C.B. Phillips
Causal Change Detection In Possibly Integrated Systems: Revisiting The Money-Income Relationship, Shu-Ping Shi, Stan Hurn, Peter C.B. Phillips
Cowles Foundation Discussion Papers
This paper re-examines changes in the causal link between money and income in the United States for over the past half century (1959 - 2014). Three methods for the data-driven discovery of change points in causal relationships are proposed, all of which can be implemented without prior detrending of the data. These methods are a forward recursive algorithm, a recursive rolling algorithm and the rolling window algorithm all of which utilize subsample tests of Granger causality within a lag-augmented vector autoregressive framework. The limit distributions for these subsample Wald tests are provided. The results from a suite of simulation experiments …
Structural Inference From Reduced Forms With Many Instruments, Peter C.B. Phillips, Wayne Yuan Gao
Structural Inference From Reduced Forms With Many Instruments, Peter C.B. Phillips, Wayne Yuan Gao
Cowles Foundation Discussion Papers
This paper develops exact finite sample and asymptotic distributions for structural equation tests based on partially restricted reduced form estimates. Particular attention is given to models with large numbers of instruments, wherein the use of partially restricted reduced form estimates is shown to be especially advantageous in statistical testing even in cases of uniformly weak instruments and reduced forms. Comparisons are made with methods based on unrestricted reduced forms, and numerical computations showing finite sample performance of the tests are reported. Some new results are obtained on inequalities between noncentral chi-squared distributions with different degrees of freedom that assist in …
Homogeneity Pursuit In Panel Data Models: Theory And Applications, Peter C.B. Phillips, Liangjun Su, Wuyi Wang
Homogeneity Pursuit In Panel Data Models: Theory And Applications, Peter C.B. Phillips, Liangjun Su, Wuyi Wang
Cowles Foundation Discussion Papers
This paper studies estimation of a panel data model with latent structures where individuals can be classified into different groups where slope parameters are homogeneous within the same group but heterogeneous across groups. To identify the unknown group structure of vector parameters, we design an algorithm called Panel-CARDS which is a systematic extension of the CARDS procedure proposed by Ke, Fan, and Wu (2015) in a cross section framework. The extension addresses the problem of comparing vector coefficients in a panel model for homogeneity and introduces a new concept of controlled classification of multidimensional quantities called the segmentation net. We …