Accepted Papers

The Review of Economic Studies is one of the most highly respected academic journals in the field of economics. It is known for publishing leading research in all areas of economics, from microeconomics to macroeconomics. The journal is published by the Oxford University Press.

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Revisiting the Non-Parametric Analysis of Time-Inconsistent Preferences

Federico Echenique and Gerelt Tserenjigmid

We revisit the recent revealed preference analysis of sophisticated quasi-hyperbolic consumers by Blow, Browning, and Crawford (2021) (BBC). We show that BBC’s revealed preference test is too lax. There are non-rationalizable data that would pass their test. A basic problem with their test is that it requires finding a certain endogenous elasticity, without regard to the rationalizing utility. Their approach motivates a more stringent test, also based on first-order conditions, that would connect the endogenous elasticity and utility: We show that this test is also too lax.

Overconfidence and Prejudice

Paul Heidhues, Botond Kőszegi, and Philipp Strack

We develop a model of multi-dimensional misspecified learning in which an overconfident agent learns about groups in society from observations of his and others’ successes. We show that the average person sees his group relative to other groups too positively, and this in-group bias exhibits systematic comparative-statics patterns. First, a person is most likely to have negative opinions about other groups he competes with. Second, while information about another group’s achievements does not lower a person’s prejudice, information about economic or social forces affecting the group can, and personal contact with group members has a beneficial effect that is larger than in classical settings.

Community Enforcement with Endogenous Records

Harry Pei

I study repeated games with anonymous random matching where players can add or remove signals from their records. The ability to manipulate records introduces monotonicity constraints on players’ continuation values, under which sufficiently long-lived players will almost never cooperate. When players’ expected lifespans are intermediate, their ability to sustain cooperation depends on (i) whether their actions are complements or substitutes and (ii) whether manipulation takes the form of adding or removing signals.

Behavioral Causal Inference

Ran Spiegler

When inferring causal effects from correlational data, a common practice by professional researchers but also lay people is to control for potential confounders. Inappropriate controls produce erroneous causal inferences. I model decision-makers who use endogenous observational data to learn actions’ causal effect on payoff-relevant outcomes. Different decision-maker types use different controls. Their resulting choices affect the very correlations they learn from, thus calling for equilibrium analysis of the steady-state welfare cost of bad controls.

Making Decisions under Model Misspecification

Simone Cerreia-Vioglio, Lars Peter Hansen, Fabio Maccheroni, and Massimo Marinacci

We use decision theory to confront uncertainty that is sufficiently broad to incorporate “models as approximations.” We presume the existence of a featured collection of what we call “structured models” that have explicit substantive motivations. The decision maker confronts uncertainty through the lens of these models, but also views these models as simplifications, and hence, as misspecified.

Pseudo Lindahl Equilibrium as a Collective Choice Rule

Faruk Gul and Wolfgang Pesendorfer

A collective choice problem specifies a finite set of alternatives from which a group of expected utility maximizers must choose. We associate a collective pseudo market with every collective choice problem and establish the existence and efficiency of pseudo Lindahl equilibrium (PLE) allocations. We also associate a cooperative bargaining problem with every collective choice problem and define a set-valued solution concept, the ω-weighted Nash bargaining set where ω is a vector of welfare weights. We provide axioms that characterize the ω-weighted Nash bargaining set.

Surviving Childhood: Effects of Removing a Child From Home

Ronja Helénsdotter

This paper studies the effects of the court-ordered removal of children from home on health, crime, and education. To isolate causal effects, I exploit quasi-random variation in judge assignment together with across-judge variation in the tendency to favor removal in an instrumental variable (IV) design. Using a novel data set (N=26,579) based on Swedish court documents that I transcribe and link with detailed register data, I find that court-ordered out-of-home placement has large adverse effects on the mortality of the marginal child.

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