posted Jan 17, 2012 10:23 AM by Kevin Boudreau
9. Directed Search over the Life Cycle
by Guido Menzio, Irina A. Telyukova, Ludo Visschers - #17746 (EFG)
Abstract:
We develop a life-cycle model of the labor market in which different
worker-firm matches have different quality and the assignment of the
right workers to the right firms is time consuming because of search
and learning frictions. The rate at which workers move between
unemployment, employment and across different firms is endogenous
because search is directed and, hence, workers can choose whether to
seek low-wage jobs that are easy to find or high-wage jobs that are
hard to find. We calibrate our theory using data on labor market
transitions aggregated across workers of different ages. We validate
our theory by showing that it correctly predicts the pattern of labor
market transitions for workers of different ages. Finally, we use
our theory to decompose the age profiles of transition rates, wages
and productivity into the effects of age variation in work-life
expectancy, human capital and match quality.
http://papers.nber.org/papers/W17746 |
posted Jan 17, 2012 10:19 AM by Kevin Boudreau
Interesting: FInance + Economic Analysis of Social Networks + Diffusion/Adoption (Empirics!)
6. The Diffusion of Microfinance
by Abhijit Banerjee, Arun G. Chandrasekhar, Esther Duflo, Matthew O. Jackson - #17743 (TWP)
http://papers.nber.org/papers/W17743Abstract:
We examine how participation in a microfinance program diffuses
through social networks. We collected detailed demographic and
social network data in 43 villages in South India before microfinance
was introduced in those villages and then tracked eventual
participation. We exploit exogenous variation in the importance (in
a network sense) of the people who were first informed about the
program, "the injection points". Microfinance participation is
higher when the injection points have higher eigenvector centrality.
We estimate structural models of diffusion that allow us to (i)
determine the relative roles of basic information transmission versus
other forms of peer influence, and (ii) distinguish information
passing by participants and non-participants. We find that
participants are significantly more likely to pass information on to
friends and acquaintances than informed non-participants, but that
information passing by non-participants is still substantial and
significant, accounting for roughly a third of informedness and
participation. We also find that, conditioned on being informed, an
individual's decision is not significantly affected by the
participation of her acquaintances. |
posted Dec 17, 2011 7:03 AM by Kevin Boudreau
What difference does dynamics make? The case of digital cameras ☆Weifang Loua, David Prentice , a,  , Xiangkang Yina | a | School of Economics and Finance, La Trobe University, 3086, Victoria, Australia |
Received 12 December 2008; revised 5 May 2011; Accepted 7 May 2011. Available online 14 May 2011. AbstractWhen the well-known BLP model is applied to products with rapid technological changes and declining prices it tends to yield implausible results. A sequence of increasingly sophisticated dynamic demand models, most recently Gowrisankaran and Rysman (2009, hereafter GR), have been developed to overcome these problems. We apply both models to new data on the US digital camera market. In addition, we demonstrate that the GR model can be specified as a BLP model plus an additional set of terms. This suggests that a dynamic model can be estimated as a BLP model plus a non-parametric function which is less computationally demanding. As a first step to implementing this semi-parametric approach we estimate a BLP model augmented with age as a proxy for the non-parametric component. We find that demand for digital cameras is more elastic when demand dynamics is accounted for in both the dynamic model and the BLP model with the age proxy. This suggests that the market is more competitive though the results are consistent with firms engaging in intertemporal price discrimination. Merger simulations predict the lowest price and quantity changes using the GR model.
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posted Dec 13, 2011 12:01 PM by Kevin Boudreau
| (20) Automobiles on Steroids: Product Attribute Trade-Offs and Technological Progress in the Automobile Sector | | Christopher R. Knittel | | This paper estimates the technological progress that has occurred since 1980 in the automobile industry and the trade-offs faced when choosing between fuel economy, weight, and engine power characteristics. The results suggest that if weight, horsepower, and torque were held at their 1980 levels, fuel economy could have increased by nearly 60 percent from 1980 to 2006. Once technological progress is considered, meeting the CAFE standards adopted in 2007 will require halting the trend in weight and engine power characteristics, but little more. In contrast, the standards recently announced by the new administration, whi |
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posted Dec 13, 2011 11:59 AM by Kevin Boudreau
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updated Dec 13, 2011 12:01 PM
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| (11) Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets | | Avi Goldfarb and Mo Xiao | We examine US local telephone markets shortly after the Telecommunications Act of 1996. The data suggest that more experienced, better-educated managers tend to enter markets with fewer competitors. This motivates a structural econometric model based on behavioral game theory that allows heterogeneity in managers' ability to conjecture competitor behavior. We find that manager characteristics are key determinants in managerial ability. This estimate of ability predicts out-of-sample success. Also, the measured level of ability rises following a shakeout, suggesting that our behavioral assumptions may be most relevant early in the industry's life cycle. (JEL L96, L98, M10)
| | Full-Text Access | Supplementary Materials |
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posted Dec 13, 2011 11:57 AM by Kevin Boudreau
| (3) Search and Satisficing | | Andrew Caplin, Mark Dean and Daniel Martin | Many everyday decisions are made without full examination of all available options, and, as a result, the best available option may be missed. We develop a search-theoretic choice experiment to study the impact of incomplete consideration on the quality of choices. We find that many decisions can be understood using the satisficing model of Herbert Simon (1955): most subjects search sequentially, stopping when a "satisficing" level of reservation utility is realized. We find that reservation utilities and search order respond systematically to changes in the decision making environment. (JEL D03, D12, D83)
| | Full-Text Access | Supplementary Materials |
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posted Nov 18, 2011 12:30 AM by Kevin Boudreau
posted Nov 17, 2011 3:59 PM by Kevin Boudreau
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updated Nov 17, 2011 3:59 PM
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posted Nov 17, 2011 3:14 PM by Kevin Boudreau
| (2) Neuroeconomic Foundations of Economic Choice--Recent Advances | | Ernst Fehr and Antonio Rangel | Neuroeconomics combines methods and theories from neuroscience psychology, economics, and computer science in an effort to produce detailed computational and neurobiological accounts of the decision-making process that can serve as a common foundation for understanding human behavior across the natural and social sciences. Because neuroeconomics is a young discipline, a sufficiently sound structural model of how the brain makes choices is not yet available. However, the contours of such a computational model are beginning to arise; and, given the rapid progress, there is reason to be hopeful that the field will eventually put together a satisfactory structural model. This paper has two goals: First, we provide an overview of what has been learned about how the brain makes choices in two types of situations: simple choices among small numbers of familiar stimuli (like choosing between an apple or an orange), and more complex choices involving tradeoffs between immediate and future consequences (like eating a healthy apple or a less-healthy chocolate cake). Second, we show that, even at this early stage, insights with important implications for economics have already been gained.
| | Full-Text Access | Supplementary Materials |
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posted Oct 24, 2011 12:18 AM by Kevin Boudreau
Identification and Inference with Many Invalid Instruments | NBER Working Paper No. 17519
Issued in October 2011
NBER Program(s): LS PE
We analyze linear models with a single endogenous regressor in the presence of many instrumental variables. We weaken a key assumption typically made in this literature by allowing all the instruments to have direct effects on the outcome. We consider restrictions on these direct effects that allow for point identification of the effect of interest. The setup leads to new insights concerning the properties of conventional estimators, novel identification strategies, and new estimators to exploit those strategies. A key assumption underlying the main identification strategy is that the product of the direct effects of the instruments on the outcome and the effects of the instruments on the endogenous regressor has expectation zero. We argue in the context of two specific examples with a group structure that this assumption has substantive content. |
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