Page 31 – The Review of Economic Studies

Trust in Risk Sharing: A Double-Edged Sword

3 July 2023

Harold L. Cole, Dirk Krueger, George J. Mailath, and Yena Park

We analyze efficient risk-sharing arrangements when the value from deviating is determined endogenously by another risk sharing arrangement. Coalitions form to insure against idiosyncratic income risk. Self-enforcing contracts for both the original coalition and any coalition formed (joined) after deviations rely on a belief in future cooperation which we term “trust”.

Dynamic Opinion Aggregation: Long-Run Stability and Disagreement

3 July 2023

Simone Cerreia-Vioglio, Roberto Corrao, and Giacomo Lanzani

This paper proposes a model of non-Bayesian social learning in networks that accounts for heuristics and biases in opinion aggregation. The updating rules are represented by nonlinear opinion aggregators from which we extract two extreme networks capturing strong and weak links.

Submission fee increase from 1 July 2023

3 July 2023

Our submission fees increased on 1 July 2023

When Less is More: Experimental Evidence on Information Delivery During India’s Demonetization

2 July 2023

Abhijit Banerjee, Emily Breza, Arun Chandrasekhar, and Benjamin Golub

In disseminating information, policymakers face a choice between broadcasting to everyone and informing a small number of “seeds” who then spread the message. While broadcasting maximizes the initial reach of messages, we offer theoretical and experimental evidence that it need not be the best strategy.

How Responsive are Wages to Firm-Specific Changes in Labor Demand? Evidence from Idiosyncratic Export Demand Shocks

2 July 2023

Andrew Garin and Filipe Silvério

Do firms adjust wages in response to changes in their own demand level, or to changes in competitive pressure from rival employers? We study how exporters adjust wages in response to unexpected product demand shocks during the 2008–2009 Great Recession. Using rich data on Portuguese firms’ pre-recession export shipments, we measure firm-level shocks to export demand during the Recession.

Experimentation in Endogenous Organizations

22 June 2023

Germán Gieczewski and Svetlana Kosterina

We study policy experimentation in organizations with endogenous membership. An organization decides when to stop a policy experiment based on its results. As information arrives, agents update their beliefs, and enter or leave the organization based on their expected flow payoffs.

Changes in Social Network Structure in Response to Exposure to Formal Credit Markets

22 June 2023

Abhijit Banerjee, Emily Breza, Arun G. Chandrasekhar, Esther Duflo, Matthew O. Jackson, and Cynthia Kinnan

We show that the entry of formal financial institutions can have far-reaching and long-lasting impacts on informal lending and social networks more generally. We first study the introduction of microfinance in 75 villages in Karnataka, India, 43 of which were exposed to microfinance. Using difference-in-differences, we show that networks shrank more in exposed villages.

Memory and Markets

22 June 2023

Sergey Kovbasyuk and Giancarlo Spagnolo

In many environments, including credit and online markets, records about participants are collected, published, and erased after some time. We study the effects of erasing past records in a dynamic market where the quality of sellers follows a Markov process, and buyers leave feedback about sellers to an information intermediary.

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Recently accepted to #REStud, "Overconfidence and Prejudice," from Heidhues, Kőszegi and Strack:

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"Can communities sustain cooperation when players can add or erase signals from their records?
Sufficiently long-lived players can hardly sustain any cooperation, but players w/ intermediate lifespans can sustain some cooperation."

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Recently accepted to #REStud, "Behavioral Causal Inference," from Ran Spiegler:

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Posts

Trust in Risk Sharing: A Double-Edged Sword

Dynamic Opinion Aggregation: Long-Run Stability and Disagreement

Submission fee increase from 1 July 2023

When Less is More: Experimental Evidence on Information Delivery During India’s Demonetization

How Responsive are Wages to Firm-Specific Changes in Labor Demand? Evidence from Idiosyncratic Export Demand Shocks

Experimentation in Endogenous Organizations

Changes in Social Network Structure in Response to Exposure to Formal Credit Markets

Memory and Markets

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