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Information and Bargaining through Agents: Experimental Evidence from Mexico’s Labor Courts

Joyce Sadka, Enrique Seira, and Christopher Woodruff

Well-functioning courts are essential for the health of both financial and real economies. Courts function poorly in most lower-income countries, but the root causes of poor performance are not well understood. We use field experiments with ongoing cases to analyze sources of dysfunction in Mexico’s largest labor court. We provide parties with personalized predictions for case outcomes and show that this information nearly doubles settlement rates and reduces average case duration.

Granular Search, Market Structure, and Wages

Gregor Jarosch, Jan Sebastian Nimczik, and Isaac Sorkin

We develop a model of size-based market power in a frictional labor market. In the canonical search environment, competition for workers is encoded in outside options. In our granular setting, large employers remove their own job postings from their workers’ outside option. Thus, size gives market power and a more concentrated market structure depresses wages because it reduces competition for workers.

Strategic Foundations of Efficient Rational Expectations

Paulo Barelli, Srihari Govindan, and Robert Wilson

We study an economy with traders whose payoffs are quasilinear and whose private signals are informative about an unobserved state parameter. The limit economy has infinitely many traders partitioned into a finite set of symmetry classes called types. Market mechanisms in a class that includes auctions yield the same outcome as the Walrasian rational expectations equilibrium if and only if the efficient allocation has a monotonicity property. Examples illustrate cases where they differ. Monotonicity restricts the heterogeneity among traders’ types.

Measuring Diffusion over a Large Network

Xiaoqi He and Kyungchul Song

This paper introduces a measure of the diffusion of binary outcomes over a large, sparse network, when the diffusion is observed in two time periods. The measure captures the aggregated spillover effect of the state-switches in the initial period on their neighbors’ outcomes in the second period. This paper introduces a causal network that captures the causal connections among the cross-sectional units over the two periods. It shows that when the researcher’s observed network contains the causal network as a subgraph, the measure of diffusion is identified as a simple, spatio-temporal dependence measure of observed outcomes.

Migration and the Value of Social Networks

Joshua E. Blumenstock, Guanghua Chi, and Xu Tan

How do social networks influence the decision to migrate? Prior work suggests two distinct mechanisms that have historically been difficult to differentiate: as a conduit of information, and as a source of social and economic support. We disentangle these mechanisms using a massive ‘digital trace’ dataset that allows us to observe the migration decisions made by millions of individuals over several years, as well as the complete social network of each person in the months before and after migration.

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Version 2.0 of the National Elections Database is online!
We now cover presidential and parliamentary elections 1789–2023, extending the post-1945 data of Electoral Turnovers @RevEconStudies (https://academic.oup.com/restud/advance-article/doi/10.1093/restud/rdae108/7899604).
w/ @benjaminmarx and @vincent_rollet

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``Many networks naturally form as people come together to form subgraphs, e.g. as coauthors of a paper, or other teams. This is the basis for a new, computationally tractable method of estimating network formation."

From Chandrasekhar & @JacksonmMatt:

https://www.restud.com/a-network-formation-model-based-on-subgraphs/

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Recently accepted to #REStud, ``Simultaneous Search and Adverse Selection," from Auster, Gottardi and Wolthoff @rpwolthoff:

https://www.restud.com/simultaneous-search-and-adverse-selection/

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Recently accepted to #REStud, ``Affiliated Common Value Auctions with Costly Entry," from Murto & Välimäki:

https://www.restud.com/affiliated-common-value-auctions-with-costly-entry/

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