Page 24 – The Review of Economic Studies

Editorial Board changes

11 January 2024

We thank Board Members and Foreign Editors who stepped down during 2023 and welcome new Board Members and Foreign Editors. Vincent Sterk has been appointed new Joint Managing Editor.

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

11 January 2024

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

11 January 2024

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.

Designing Interrogations

7 January 2024

Alessandro Ispano and Péter Vida

We provide a model of interrogations with two-sided asymmetric information. The suspect knows his status as guilty or innocent and the likely strength of the law enforcer’s evidence, which is informative about the suspect’s status and may also disprove lies. We compare prosecution errors in the equilibrium of the one-shot interrogation and in the optimal mechanism under full commitment.

Voluntary Disclosure in Asymmetric Contests

7 January 2024

Christian Ewerhart and Julia Lareida

This paper studies the incentives for interim voluntary disclosure of verifiable information in probabilistic all-pay contests with two-sided incomplete information. Private information may concern marginal cost, valuations, and ability. Our main result says that, if the contest is uniformly asymmetric, then full revelation is the unique perfect Bayesian equilibrium outcome.

Strategic Foundations of Efficient Rational Expectations

12 December 2023

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

12 December 2023

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

6 December 2023

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.

Posts

Editorial Board changes

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

Granular Search, Market Structure, and Wages

Designing Interrogations

Voluntary Disclosure in Asymmetric Contests

Strategic Foundations of Efficient Rational Expectations

Measuring Diffusion over a Large Network

Migration and the Value of Social Networks

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