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A Walrasian Mechanism with Markups for Nonconvex Markets

Paul Milgrom and Mitchell Watt

We introduce markup equilibrium—an extension of Walrasian equilibrium in which consumers pay a fixed percentage markup over producer prices. In quasilinear markets, markup equilibria exist despite non-convexities. They are resource-feasible and envy-free, incur no budget deficit, and require little more communication and computation than ordinary Walrasian equilibrium. The associated markup mechanism is asymptotically incentive-compatible.

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The Effect of Provider Diversity on Racial Health Disparities: Evidence from the Military

Michael Frakes and Jonathan Gruber

We assess the relationship between the racial diversity of medical providers and racial health disparities in the use of preventive care and in patient outcomes. We use unique data from the Military Health System, where we observe providers as patients so that we can identify their race, and where moves across bases change exposure to provider race in a plausibly exogenous fashion.

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Religion, Education, and the State

Samuel Bazzi, Masyhur Hilmy, and Benjamin Marx

This paper explores how state and religious providers of education compete during the nation building process. Using novel administrative data, we characterize the evolution of Indonesia’s Islamic education system and religious school choice after the introduction of mass public primary schooling in the 1970s. Funded through informal taxation, Islamic schools competed with the state by entering in the same markets. While primary enrollment shifted towards state schools, religious education increased overall as Islamic schools absorbed growing demand for secondary education.

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Homeownership, Polarization, and Inequality

Andrii Parkhomenko

Why are job polarization and income inequality higher in large U.S. cities? I offer a new explanation: when house prices grow faster in large cities, middle-income households increasingly cannot afford to own a house there. They move to smaller cities and the middle of the income distribution in large cities hollows out, making them more polarized and unequal. I document that (1) cities with higher price growth experienced larger polarization and increase in inequality since 1980 and (2) middle-income households migrate more often to cheaper locations for housing-related reasons than low- or high-income households.

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Policy Diffusion and Polarization across U.S. States

Stefano DellaVigna and Woojin Kim

Economists have studied the impact of numerous state laws, from welfare rules to voting ID requirements. Yet for all this policy evaluation, what do we know about policy diffusion—how these policies are introduced and spread from state to state? We present a series of facts based on a data set of 602 U.S. state policies spanning the past 7 decades. First, proxies of state capacity do not predict a higher likelihood of innovating new policies, but the political leaning of the state does predict a higher likelihood of introducing partisan laws since 1990.

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The value of information in a congested fishery

Gabriel Englander, Larry Karp, and Leo Simon

We model a fishery with potential congestion, in which firms obtain public and private signals about the location of the densest fish stock. We analytically determine the regions of parameter space where greater precision of public and/or private information increases welfare, and we examine the effects of two types of information sharing. Using high-resolution data from the world’s largest fishery, we estimate the structural model. Point estimates imply that more precise private information raises welfare, whereas more precise public information has a negligible effect on welfare.

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Women in the Courtroom: Technology and Justice

Heng Chen, Yuyu Chen, and Qingxu Yang

Our study analyzes 6 million civil judgments in China from 2014 to 2018, documenting gender disparities that disfavor female litigants. We investigate the impact of an open justice reform that mandated courts to broadcast legal proceedings live on a centralized online platform. By exploiting variations in its implementation across courts and over time and employing both difference-in-differences and Bartik IV approaches, we find that gender disparities in chances of winning decrease as broadcast intensity increases.

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The Geography of Business Dynamism and Skill-Biased Technical Change

Hannah Rubinton

This paper shows that the growing disparities between big and small cities in the U.S. since 1980 can be explained by firms endogenously responding to a skill-biased technology shock. With the introduction of a new skill-biased technology that is high fixed cost but low marginal cost, firms endogenously adopt more in big cities, cities that offer abundant amenities for high-skilled workers, and cities that are more productive in using high-skilled labor.

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In their paper, recently accepted to #REStud, Milgrom & Watt @MitchLWatt introduce “Walrasian markup mechanisms”—feasible, nearly efficient, and nearly incentive compatible mechanisms for nonconvex markets using linear prices.

https://www.restud.com/a-walrasian-mechanism-with-markups-for-nonconvex-markets/

#econtwitter

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In their paper, recently accepted to #REStud, Frakes @MichaelFrakes2 and Gruber find a reduction in racial health disparities among chronic-disease patients following an increase in the racial diversity of the surrounding medical providers.

https://www.restud.com/the-effect-of-provider-diversity-on-racial-health-disparities-evidence-from-the-military/

#econtwitter

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"State schools aimed to secularize Indonesia, but religious schools adapted, competing for students and strengthening Islamic identity instead."

Recently accepted to #REStud, from @samuelbazzi, Hilmy and @benjaminmarx:

https://www.restud.com/religion-education-and-the-state/

#EconTwitter

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Recently accepted to #REStud, "Homeownership, Polarization, and Inequality," from Andrii Parkhomenko:

https://www.restud.com/homeownership-polarization-and-inequality/

#EconTwitter

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