Defaults often have a large influence on consumer decisions. We identify anoverlooked but practical alternative to defaults: requiring individuals to make explicitchoices for themselves. We study such ?active decisions? in the context of401(k) saving. We find that compelling new hires to make...

Monotonicity of the equilibrium bidding strategy is a key property of structural auction models. Traditional nonparametric estimators provide a flexible means of uncovering salient features of auction data, but do not formally impose the monotonicity assumption that is inherent in the models...

Monotonicity of the equilibrium bidding strategy is a key property of structural auction models. Traditional nonparametric estimators provide a flexible means of uncovering salient features of auction data, but do not formally impose the monotonicity assumption that is inherent in the models...

In settings where there is imperfect information about an underlying state of nature, but where inferences are made sequentially and are publicly observable, information cascades can lead to rational herding. Cascade phenomena may be seen in a variety of areas including technology adoption,...

Economics

Economics

Economics

The basic machines of macroeconomics. Ramsey, Solow, Samuelson-Diamond, RBCs, ISLM, Mundell-Fleming, Fischer-Taylor. How they work, what shortcuts they take, and how they can be used. Half-term subject. From the course home page: Course Description This half semester class presents an...

We revisit and critically reevaluate the widely accepted modernization hypothesis which claims that per capita income causes the creation and the consolidation of democracy. Existing studies find support for this hypothesis because they fail to control for the presence of omitted variables....

We study a dynamic general equilibrium model where innovation takes the form of the introduction of new goods whose production requires skilled workers. Innovation is followed by a costly process of standardization, whereby these new goods are adapted to be produced using unskilled labor. Our...