{"title":"NONSTANDARD CHOICE IN MATCHING MARKETS","authors":"Gian Caspari, Manshu Khanna","doi":"10.1111/iere.12734","DOIUrl":"https://doi.org/10.1111/iere.12734","url":null,"abstract":"We explore the possibility of designing matching mechanisms that can accommodate nonstandard choice behavior. We pin down the necessary and sufficient conditions on participants' choice behavior for the existence of stable and incentive‐compatible mechanisms. Our results imply that well‐functioning matching markets can be designed to adequately accommodate a plethora of choice behaviors, including the standard behavior consistent with preference maximization. To illustrate the significance of our results in practice, we show that a simple modification in a commonly used matching mechanism enables it to accommodate nonstandard choice behavior.","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"29 1","pages":""},"PeriodicalIF":1.5,"publicationDate":"2024-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142260039","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"SELF‐EMPLOYMENT AND LABOR MARKET RISKS","authors":"Richard Audoly","doi":"10.1111/iere.12732","DOIUrl":"https://doi.org/10.1111/iere.12732","url":null,"abstract":"I study the labor market risks associated with self‐employment. I document that the self‐employed are subject to larger earnings fluctuations than employees and frequently transition into unemployment. I analyze the provision of benefits targeted at these risks using a calibrated search model with (i) precautionary savings, (ii) work opportunities in paid‐ and self‐employment, and (iii) skill heterogeneity. Extending the U.S. unemployment insurance scheme to the self‐employed increases the transition rate from self‐employment to unemployment and yields an unequal benefits to contributions ratio across skill groups. At the calibrated parameters, the self‐employed in the middle of the skill distribution lose welfare.","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"20 1","pages":""},"PeriodicalIF":1.5,"publicationDate":"2024-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214029","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"INVENTORIES, INPUT COSTS, AND PRODUCTIVITY GAINS FROM TRADE LIBERALIZATIONS","authors":"Shafaat Yar Khan, Armen Khederlarian","doi":"10.1111/iere.12731","DOIUrl":"10.1111/iere.12731","url":null,"abstract":"<p>Sourcing internationally allows firms to access cheaper or better inputs but increases logistical costs, particularly through higher inventory holdings. This article examines the productivity gains from trade liberalizations accounting for inventory costs—typically omitted from revenue-based measures of productivity. In model simulations, we show that omitting these overestimates the effect of input tariffs on productivity and that controlling for inventories in the estimation of productivity corrects the bias. We document these facts during India's 1990s reforms. First, firms' inventories increase strongly with imports. Second, productivity gains drop by 20–50% once inventory costs are accounted for.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"175-199"},"PeriodicalIF":1.5,"publicationDate":"2024-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214030","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"CONSTANT DISCOUNTING, TEMPORAL INSTABILITY, AND DYNAMIC INCONSISTENCY IN DENMARK: A LONGITUDINAL FIELD EXPERIMENT","authors":"Glenn W. Harrison, Morten I. Lau, Hong Il Yoo","doi":"10.1111/iere.12729","DOIUrl":"10.1111/iere.12729","url":null,"abstract":"<p>Claims that individuals have dynamically inconsistent preferences are usually made by studying individual discount rates over different time delays, but where those discount rates are elicited at a single point in time. However, to test dynamic inconsistency one has to know if the same subject has a different discounting function <i>at a later point in time</i>. We evaluate data from a longitudinal field experiment undertaken with a nationally representative sample of the adult Danish population. We cannot reject the hypothesis of constant discounting at the population level, but we reject the hypotheses of temporal stability and dynamic consistency.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"363-392"},"PeriodicalIF":1.5,"publicationDate":"2024-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12729","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214032","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"MACRO UNCERTAINTY, UNEMPLOYMENT RISK, AND CONSUMPTION DYNAMICS","authors":"Joonseok Oh, Anna Rogantini Picco","doi":"10.1111/iere.12730","DOIUrl":"10.1111/iere.12730","url":null,"abstract":"<p>Households' income heterogeneity is important to explain consumption dynamics in response to aggregate macro uncertainty: an increase in uncertainty generates a consumption drop that is stronger for lower-income households. At the same time, labor markets are strongly responsive to macro uncertainty. A heterogeneous-agent New Keynesian model with search-and-matching frictions in the labor market can account for these empirical findings. The mechanism at play is a feedback loop between lower-income households who, being subject to higher unemployment risk, contract consumption more in response to heightened uncertainty, and firms that post fewer vacancies following a drop in demand.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"287-312"},"PeriodicalIF":1.5,"publicationDate":"2024-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214033","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Salvador Barberà, Dolors Berga, Bernardo Moreno, Antonio Nicolò
{"title":"CONDORCET CONSISTENCY AND PAIRWISE JUSTIFIABILITY UNDER VARIABLE AGENDAS","authors":"Salvador Barberà, Dolors Berga, Bernardo Moreno, Antonio Nicolò","doi":"10.1111/iere.12728","DOIUrl":"10.1111/iere.12728","url":null,"abstract":"<p>We compare the consequences of imposing upon collective choice functions the classical requirement of Condorcet consistency with those arising when requiring the functions to satisfy the principle of pairwise justifiability. We show that, despite the different logic underlying these two requirements, they are equivalent when applied to anonymous and neutral rules defined over a class of domains. The class contains the universal, the single-peaked, and that of order restriction, among other preference domains.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"313-329"},"PeriodicalIF":1.5,"publicationDate":"2024-08-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12728","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142214034","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"AGE DISCONTINUITY AND NONEMPLOYMENT BENEFIT POLICY EVALUATION THROUGH THE LENS OF JOB SEARCH THEORY","authors":"Bruno Decreuse, Guillaume Wilemme","doi":"10.1111/iere.12726","DOIUrl":"10.1111/iere.12726","url":null,"abstract":"<p>Recent papers use regression discontinuity designs (RDDs) based on age discontinuity to evaluate social assistance (SA) and unemployment insurance (UI) extension policies. Job search theory predicts that such designs generate biased estimates of the policy-relevant treatment effect. Owing to market frictions, people below the age threshold modify their search behavior in expectation of future eligibility. We use a job search model to quantify the biases on various datasets in the literature. The impacts of SA benefits on employment are underestimated, whereas those of UI extensions on nonemployment duration are overestimated. The article provides insights for RDD evaluations of age-discontinuous policies.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"259-286"},"PeriodicalIF":1.5,"publicationDate":"2024-08-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12726","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141969833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"THE UNPRECEDENTED FALL IN U.S. REVOLVING CREDIT","authors":"Gajendran Raveendranathan, Georgios Stefanidis","doi":"10.1111/iere.12727","DOIUrl":"10.1111/iere.12727","url":null,"abstract":"<p>After decades of consistent growth, U.S. revolving credit declined drastically post 2009. We study the Ability to Pay provision of the Credit CARD Act of 2009, a policy that restricts credit card limits, as a contributing factor. Extending a model of revolving credit lines, we find that the policy accounts for 54–60% of the decline in revolving credit. Furthermore, the policy accounts for lower utilization rates despite tighter credit limits and higher spreads despite lower default risk. The policy's goal of consumer protection is achieved for a few consumers with time-inconsistent preferences; most individuals are hurt.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"393-451"},"PeriodicalIF":1.5,"publicationDate":"2024-07-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12727","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141873466","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"UNEQUAL PEACE","authors":"Ali Kamranzadeh, Charles Z. Zheng","doi":"10.1111/iere.12725","DOIUrl":"10.1111/iere.12725","url":null,"abstract":"<p>A mediator proposes a settlement between two contestants to avoid a conflict where the cost each contestant bears is inversely related to the contestant's privately known strength. Their strength levels are identically distributed, and their welfares weigh equally in the mediator's objective. However, the optimal proposal offers one contestant much more than it does the other so that the former accepts it always, whereas the latter only occasionally. This unequal treatment improves the prospect of peace by making one contestant willing to settle without fearing that the action signals his weakness that his opponent can exploit should conflict occur.</p>","PeriodicalId":48302,"journal":{"name":"International Economic Review","volume":"66 1","pages":"223-258"},"PeriodicalIF":1.5,"publicationDate":"2024-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://onlinelibrary.wiley.com/doi/epdf/10.1111/iere.12725","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141740557","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}