Economic Inquiry

Articles from Vol. 50, No. 2, April

An Option Value Problem from Seinfeld
This is a paper about nothing. (JEL C61, D91, G11) I. INTRODUCTION In an episode of the sitcom Seinfeld (Season 7, Episode 9, original air date December 7, 1995), Elaine Benes uses a contraceptive sponge that gets taken off the market. She scours...
Applications Barrier to Entry and Exclusive Vertical Contracts in Platform Markets
I. INTRODUCTION Exclusive contracts in vertical relationships feature prominently in antitrust cases in network industries. At issue are contracts a firm with market power signs with its suppliers or buyers that may limit access to the market by...
Biased Information and Effort
I. INTRODUCTION Evaluation interviews are a usual practice in firms. Addison and Belfield (2008) show that 61% of British establishments in the 2004 Working Employment Relations Survey claim that all their workers are involved in performance appraisals....
Can't Buy Me Love? A Field Experiment Exploring the Trade-Off between Income and Caste-Status in an Indian Matrimonial Market
I. INTRODUCTION The relationship between economic motive and observance of discriminatory social customs is hardly new to economists. This is implicit in the writings of Becker (1957, 1973, 1974) on discrimination and other social customs, and explicit...
Carrots and Sticks: Prizes and Punishments in Contests
I. INTRODUCTION Contests are widely used to model political lobbying, sports competitions, job promotions, and R&D races. In most cases, the contest's organizer has some control over the structure of rewards and punishments: teachers determine...
Do Rent-Seeking Groups Announce Their Sharing Rules?
I. INTRODUCTION Rent seeking can be seen all around us. Firms or coalitions of firms expend resources to influence government officials who have authority to award monopoly rights. Self-interested pressure groups lobby for government subsidies....
Double Majors: One for Me, One for the Parents?
I. INTRODUCTION At least a quarter of college students have more than one undergraduate major (2003 National Survey of College Graduates), and the share of college students choosing more than one major is increasing at a very fast rate (Lewin 2002)....
Earnings and Ratings at Google Answers
I. INTRODUCTION Most research on Internet transactions considers online markets as forums to facilitate the sale of physical goods (Ellison and Fisher Ellison 2009; Goolsbee and Chevalier 2003). Sometimes the Internet is analyzed as a market for...
Emergent Extremism in a Multi-Agent Model of Religious Clubs
I. INTRODUCTION Religious extremism is as old as religion itself, but the tendency to promote militancy and terrorism from within extremist religions appears to be much more common now than in times past (Juergensmeyer 2001, Stern 2003, Wiktorowicz...
How Groups Reach Agreement in Risky Choices: An Experiment
I. INTRODUCTION Although economists model decision makers as isolated individuals, within firms and organizations decisions are often taken through deliberations in groups and committees. Many of those decisions involve options with different degrees...
Individual Behavior and Bidding Heterogeneity in Sealed Bid Auctions Where the Number of Bidders Is Unknown
I. INTRODUCTION Most of the work in sealed bid auction theory and related experimental work has focused on the case in which the number of bidders is known. This is, of course, not always the case in naturally occurring environments. For instance,...
Is There a "Double Bonus" from Reducing Inequality?
I. INTRODUCTION In the 1990s, a number of empirical studies found an economically and statistically significant negative relationship between inequality and long-run growth. A huge literature that has investigated the effect of inequality on growth--much...
Optimistic Behavior When a Decision Bias Is Costly: An Experimental Test
I. INTRODUCTION Uncertainty is part of a decision as soon as its consequences extend into the future. An individual faces substantial financial uncertainty when choosing education, buying a house, determining insurance coverage, and investing pension...
Rent-Seeking and Capital Accumulation
I. INTRODUCTION Rent-seeking activities are likely to generate a negative impact on the long-run performance of an economy by diverting resources away from growth-promoting activities. In addition, it is widely documented that economies are not...
Satisficing and Prior-Free Optimality in Price Competition
I. INTRODUCTION The rational choice approach to market interaction investigates price competition maintaining commonly known unbounded rationality of sellers. Undoubtedly, to explain how the reasoning of competing sellers can result in a mutually...
Spatial Competition and Strategic Firm Relocation
I. INTRODUCTION Spatial competition between firms, and their resulting pricing and location decisions have been important topics of study since Hotelling's (1929) seminal work. According to this work, firms strategically choose their location in...
Well-Informed Intermediaries in Strategic Communication
I. INTRODUCTION Recommendations from well-informed experts may influence the final users of such information, for example, patients tend to follow the prescriptions and other medical advice from their physicians. Consequently, businesses may try...
What Is the Probability Your Vote Will Make a Difference?
I. INTRODUCTION What is the probability that one vote will make a difference? This is of interest in the utility theory of voting and also for campaign strategists who must assess the costs and benefits of attempting to persuade or turn out voters...
Why Did Universities Precede Primary Schools? A Political Economy Model of Educational Change
I. INTRODUCTION Modern school systems are usually operated on a well-structured, hierarchical ladder of grade levels starting from primary school, then moving to secondary school, and finally completed at the university of higher learning. This...