Posts

Consumer Surplus of Alternative Payment Methods

Fernando Alvarez and David Argente

This paper estimates the consumer surplus from using alternative payment methods. We use evidence from Uber rides in Mexico, where riders have the option to use cash or cards to pay for rides. We design and conduct three large-scale field experiments, which involved approximately 400,000 riders. We also build a structural model which, disciplined by our new experimental data, allows us to estimate the loss of private benefits for riders when a ban on cash payments is implemented.

Fines and Financial Wellbeing

Steven Mello

While survey evidence suggests widespread financial fragility in the U.S., causal evidence on the implications of typical, negative income shocks is scarce. I estimate the impact of speeding fines on household finances using administrative traffic citation records and a panel of credit reports. Event studies reveal that fines averaging $195 are associated with a $34 increase in unpaid bills in collections. Given additional evidence that fine payment explains this effect and that default is the “last resort” for households, I interpret this finding as suggesting rates of inability to meet unplanned expenses which are consistent with the survey evidence.

The Economics of Financial Stress

Dmitriy Sergeyev, Chen Lian, and Yuriy Gorodnichenko

We study the psychological costs of financial constraints and their economic consequences. Using a representative survey of U.S. households, we document the prevalence of financial stress in U.S. households and a strong relationship between financial stress and measures of financial constraints. We incorporate financial stress into an otherwise standard dynamic model of consumption and labor supply. We emphasize two key results. First, both financial stress itself and naivete about financial stress are important components of a psychology-based theory of the poverty trap.

Electoral Turnovers

Benjamin Marx, Vincent Pons, and Vincent Rollet

In most national elections, voters face a key choice between continuity and change. Electoral turnovers occur when the incumbent candidate or party fails to win reelection. To understand how turnovers affect national outcomes, we study all presidential and parliamentary elections held globally between 1946 and 2018. We document the prevalence of turnovers over time and estimate their effects on economic performance, human development, and the quality of democracy.

A Dynamic Model of Authoritarian Social Control

Roger Lagunoff

Authoritarian regimes often use targeted social control – unequal application of the law to limit expressive freedom and enforce social conformity. At the same time, their methods appear less draconian than in the past. In this model, an authority structures punishments and rewards to compel adherence to its preferred norm. The authority’s commitment is time-limited and depends on imperfectly informative signals of a citizen’s behavior. Given two citizens with the same observed behavior, the authority imposes harsher punishments on the poorer and/or ex ante dissident individual.

Robustly Optimal Mechanisms for Selling Multiple Goods

Yeon-Koo Che and Weijie Zhong

We study robustly optimal mechanisms for selling multiple items. The seller maximizes revenue against a worst-case distribution of a buyer’s valuations within a set of distributions, called an “ambiguity” set. We identify the exact forms of robustly optimal selling mechanisms and the worst-case distributions when the ambiguity set satisfies various moment conditions on the values of subsets of goods.

Auctioning Long-Term Projects under Financial Constraints

Malin Arve and David Martimort

We consider a procurement auction for the provision of a basic service to which an add-on must later be appended. Potential providers are symmetric, have private information on their cost for the basic service and the winning firm must also implement the add-on. To finance value-enhancing activities related to the add-on, this firm may need extra funding by outside financiers. Non-verifiable effort related to these activities creates a moral hazard problem which makes the firm’s payoff function for the second period concave in returns over the relevant range.

Follow us

The Review of Economic Studies Follow

The official account of the Review of Economic Studies, one of the world's top economics journals.

RevEconStudies

We are pleased to introduce Niels Gormsen (@NielsGormsen), Copenhagen Business School & University of Chicago, as a new member of the Editorial Board of REStud. His outstanding expertise will help us continue to publish pioneering economic research.
#econtwitter #REStud

Reply on Twitter 1973778225848619493 Retweet on Twitter 1973778225848619493 1 Like on Twitter 1973778225848619493 23 Twitter 1973778225848619493

Welcome aboard! Jose Vasquez (@jpvasq), London School of Economics, has joined the Editorial Board of The Review of Economic Studies. We are grateful to have his expertise supporting our mission.
#econtwitter #REStud

Reply on Twitter 1973679447829352848 Retweet on Twitter 1973679447829352848 1 Like on Twitter 1973679447829352848 34 Twitter 1973679447829352848

We are thrilled to announce that Ro’ee Levy (@RoeeLevyZ), Tel Aviv University School of Economics, is joining the Editorial Board of The Review of Economic Studies. We look forward to his valuable contributions to the journal’s future.
#econtwitter #REStud

Reply on Twitter 1973414989479198791 Retweet on Twitter 1973414989479198791 7 Like on Twitter 1973414989479198791 58 Twitter 1973414989479198791

Exciting news: Dávid Nagy, CREI, has joined the Editorial Board of The Review of Economic Studies. His deep knowledge will help guide the journal’s editorial process.
#econtwitter #REStud

Reply on Twitter 1973291362167734513 Retweet on Twitter 1973291362167734513 3 Like on Twitter 1973291362167734513 26 Twitter 1973291362167734513
Load More