A Fast Literature Search Engine based on top-quality journals, by Dr. Mingze Gao.
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Results 536 resources
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The design of the New York City (NYC) high school match involved trade-offsamong efficiency, stability, and strategy-proofness that raise new theoreticalquestions. We analyze a model with indifferences – ties – in school preferences.Simulations with field data and the theory favor breaking indifferencesthe same way at every school – single tiebreaking – in a student-proposingdeferred acceptance mechanism. Any inefficiency associated with a realizedtiebreaking cannot be removed without harming student incentives. Finally,we empirically document the extent of potential efficiency loss associated withstrategy-proofness and stability, and direct attention to some open questions.(JEL C78, D82, I21)
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We use a new firm-level dataset that establishes the location, ownership, and activity of 650,000 multinational subsidiaries. Using a combination of four-digit-level information and input-output tables, we find the share of vertical FDI (subsidiaries that provide inputs to their parent firms) to be larger than commonly thought, even within developed countries. Most subsidiaries are not readily explained by the comparative advantage considerations whereby multinationals locate activities abroad to take advantage of factor cost differences. Instead, multinationals tend to own the stages of production proximate to their final production, giving rise to a class of high-skill, intra-industry vertical FDI. (JEL G11, J32)
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Contrary to what is usually assumed, the expected revenue for lenders as afunction of the loan rate cannot be globally hump-shaped in the Stiglitz-Weiss(1981) adverse selection model with a continuum of types. This has importantimplications. First, if there is credit rationing, there must be at least two equilibriumloan rates. Second, while at the low rate loans are rationed, all thoseapplicants willing to pay the high rate are then served. Numerical analysisshows that unless the joint distribution of risk class and output is rather special,the two loan rate outcome with rationing is unlikely. (JEL D82, G21)
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We investigate the size of the consumption drop at retirement in Italy by exploiting pension eligibility information to correct for endogenous retirement. We take a regression discontinuity approach and assume that spending would be smooth around pension eligibility if individuals did not retire. We estimate a 9.8 percent drop associated to retirement. This fall is not driven by liquidity problems for the less well off and can be accounted for by drops in work-related expenses. Retirement also induces a significant drop in the number of grown children living with their parents and this explains most of the retirement consumption drop. (JEL D91, E21, J26, J31)
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This comment addresses a point raised in Russell Cooper and Jonathan Willis (2003, 2004), which discusses whether the "gap approach" is appropriate to describe the adjustment of production factors. They show that this approach to labor adjustment as applied in Ricardo J. Caballero, Eduardo Engel, and John C. Haltiwanger (1997) and Caballero and Engel (1993) can falsely generate evidence in favor of nonconvex adjustment costs, even if costs are quadratic. Simulating a dynamic model of firm-level employment decisions with quadratic adjustment costs and estimating a gap model from the simulated data, they identify two factors producing this spurious evidence: approximating dynamic adjustment targets by static ones, and estimating the static targets themselves. This comment reassesses whether the first factor indeed leads to spurious evidence in favor of fixed adjustment costs. We show that the numerical approximation of the productivity process is pivotal for Cooper and Willis's finding. With more precise approximations of the productivity process, it becomes rare to falsely reject the quadratic adjustment cost model due to the approximation of dynamic targets by static ones. (JEL E24, J3)
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We present a model in which investment in schooling generates two kinds of returns: the labor-market return, resulting from higher wages, and a marriage-marketreturn, defined as the impact of schooling on the marital surplus shareone can extract. Men and women may have different incentives to invest inschooling because of different market wages or household roles. This asymmetrycan yield a mixed equilibrium with some educated individuals marryinguneducated spouses. When the labor-market return to schooling rises, homeproduction demands less time, and the traditional spousal labor division normsweaken, more women may invest in schooling than men. (JEL I21, J12, J24, J31)
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Consistent with mental accounting, we document that investors sometimes choose the asset allocation for one account without considering the asset allocation of their other accounts. The setting is a firm that changed its 401(k) matching rules. Initially, 401(k) enrollees chose the allocation of their own contributions, but the firm chose the match allocation. These enrollees ignored the match allocation when choosing their own-contribution allocation. In the second regime, enrollees selected both accounts' allocations, leading them to integrate the two. Own-contribution allocations before the rule change equal the combined own- and match-contribution allocations afterward, whereas combined allocations differ sharply across regimes. (JEL G11, J32)
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This note responds to Christian Bayer (2009). Cooper and Willis (2004), hereafter CW, find the aggregate nonlinearities reported in Ricardo Caballero and Eduardo Engel (1993) and Caballero, Engel, and John Haltiwanger (1997) reflect mismeasurement of theemployment gap, not nonlinearities in plant-level adjustment. Bayer concludes the CW result is not robust to alternative aggregate shock processes. We concur, but argue that the nonlinearity created by mismeasurement does not disappear. Instead, it is directly related to the level of the aggregate shock. The CW findings are robust for the natural case of unobserved gaps. (JEL E24, J23)
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We study the departure time decisions of commuters traversing a traffic network with the goal of arriving at a common destination at a specified time. There are costs associated with arriving either too early or too late, and with delays experienced at bottlenecks. Our main hypothesis, based on the Nash equilibrium distribution of departure times, implies that, for certain parameter values, expanding the capacity of an upstream bottleneck can increase the total travel costs in the network. We report the results of a large-group laboratory experiment, which are strongly supportive of this counterintuitive hypothesis, and we discuss the implications. (JEL D85, R41)
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Journals
- American Economic Review (217)
- Journal of Finance (79)
- Journal of Financial Economics (93)
- Review of Financial Studies (147)
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- Bond (26)
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- Mergers and Acquisitions (9)
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- Journal Article (536)