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Articles 571 - 600 of 2768
Full-Text Articles in Social and Behavioral Sciences
The Implementation Duality, Georg Nöldeke, Larry Samuelson
The Implementation Duality, Georg Nöldeke, Larry Samuelson
Cowles Foundation Discussion Papers
Conjugate duality relationships are pervasive in matching and implementation problems and provide much of the structure essential for characterizing stable matches and implementable allocations in models with quasilinear (or transferable) utility. In the absence of quasilinearity, a more abstract duality relationship, known as a Galois connection, takes the role of (generalized) conjugate duality. While weaker, this duality relationship still induces substantial structure. We show that this structure can be used to extend existing results for, and gain new insights into, adverse-selection principal-agent problems and two-sided matching problems without quasilinearity.
Pundits And Quacks, Jesper Rudiger, Adrien Vigier
Pundits And Quacks, Jesper Rudiger, Adrien Vigier
Cowles Foundation Discussion Papers
Do asset prices aggregate investors’ private information about the ability of financial analysts? We show that as financial analysts become reputable, the market can get trapped: Investors optimally choose to ignore their private information, and blindly follow analyst recommendations. As time goes by and recommendations accumulate, arbitrage based on the inferred ability of analysts may become profitable again. The market can thus be trapped at times and yet be able, in the long run, to sort the pundits from the quacks. However, this process is impaired when asset fundamentals are volatile: in this case, the market might be trapped indefinitely.
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Cowles Foundation Discussion Papers
We derive mean-unbiased estimators for the structural parameter in instrumental variables models where the sign of one or more first stage coefficients is known. In the case with a single instrument, the unbiased estimator is unique. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong while retaining unbiasedness in finite samples. We show numerically that unbiasedness does not come at a cost of increased dispersion: in the single instrument case, the unbiased estimator is less dispersed than the 2SLS estimator. Our finite-sample …
Transparency And Distressed Sales Under Asymmetric Information, William Fuchs, Andrzej Skrzypacz
Transparency And Distressed Sales Under Asymmetric Information, William Fuchs, Andrzej Skrzypacz
Cowles Foundation Discussion Papers
We analyze price transparency in a dynamic market with private information and correlated values. Uninformed buyers compete inter- and intra-temporarily for a good sold by an informed seller suffering a liquidity shock. We contrast public versus private price offers. In a two-period case all equilibria with private offers have more trade than any equilibrium with public offers; under some additional conditions we show Pareto-dominance of the private-offers equilibria. If a failure to trade by the deadline results in an efficiency loss, public offers can induce a market breakdown before the deadline, while trade never stops with private offers.
Innovation Adoption By Forward-Looking Social Learners, Mira Frick, Yuhta Ishii
Innovation Adoption By Forward-Looking Social Learners, Mira Frick, Yuhta Ishii
Cowles Foundation Discussion Papers
Motivated by the rise of social media, we build a model studying the effect of an economy’s potential for social learning on the adoption of innovations of uncertain quality. Provided consumers are forward-looking (i.e., recognize the value of waiting for information), equilibrium dynamics depend non-trivially on qualitative and quantitative features of the informational environment. We identify informational environments that are subject to a saturation effect, whereby increased opportunities for social learning can slow down adoption and learning and do not increase consumer welfare. We also suggest a novel, purely informational explanation for different commonly observed adoption curves (S-shaped vs. concave).
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Cowles Foundation Discussion Papers
We derive mean-unbiased estimators for the structural parameter in instrumental variables models with a single endogenous regressor where the sign of one or more first stage coefficients is known. In the case with a single instrument, the unbiased estimator is unique. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong. We show numerically that unbiasedness does not come at a cost of increased dispersion in models with a single instrument: in this case the unbiased estimator is less dispersed than the 2SLS …
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Cowles Foundation Discussion Papers
We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children aged 12 to 24 months at baseline. We estimate the determinants of material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, which have strong effects on outcomes and are complementary to both maternal skills and child’s baseline skills.
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Cowles Foundation Discussion Papers
We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children aged 12 to 24 months at baseline. We estimate the determinants of parents’ material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, emphasizing the importance of parenting interventions at an early age.
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Orazio P. Attanasio, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Cowles Foundation Discussion Papers
We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children aged 12 to 24 months at baseline. We estimate the determinants of parents’ material and time investments in these children and evaluate the impact of the treatment on such investments. We then estimate the production functions for cognitive and socio-emotional skills. The effects of the program can be explained by increases in parental investments, emphasizing the importance of parenting interventions at an early age.
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Cowles Foundation Discussion Papers
We derive mean-unbiased estimators for the structural parameter in instrumental variables models with a single endogenous regressor where the sign of one or more first stage coefficients is known. In the case with a single instrument, there is a unique non-randomized unbiased estimator based on the reduced-form and first-stage regression estimates. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong. We show numerically that unbiasedness does not come at a cost of increased dispersion in models with a single instrument: in this …
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Cowles Foundation Discussion Papers
We derive mean-unbiased estimators for the structural parameter in instrumental variables models with a single endogenous regressor where the sign of one or more first stage coefficients is known. In the case with a single instrument, the unbiased estimator is unique. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong. We show numerically that unbiasedness does not come at a cost of increased dispersion in models with a single instrument: in this case the unbiased estimator is less dispersed than the 2SLS …
Money As Minimal Complexity, Pradeep Dubey, Siddhartha Sahi, Martin Shubik
Money As Minimal Complexity, Pradeep Dubey, Siddhartha Sahi, Martin Shubik
Cowles Foundation Discussion Papers
We consider mechanisms that provide traders the opportunity to exchange commodity i for commodity j , for certain ordered pairs ij . Given any connected graph G of opportunities, we show that there is a unique mechanism M G that satisfies some natural conditions of “fairness” and “convenience.” Let M ( m ) denote the class of mechanisms M G obtained by varying G on the commodity set {1, …, m }. We define the complexity of a mechanism M in M (m) to be a pair of integers τ( M ), π( M ) which represent the “time” required …
Dynamic Mechanisms Without Money, Yingni Guo, Johannes Hörner
Dynamic Mechanisms Without Money, Yingni Guo, Johannes Hörner
Cowles Foundation Discussion Papers
We analyze the optimal design of dynamic mechanisms in the absence of transfers. The designer uses future allocation decisions as a way of eliciting private information. Values evolve according to a two-state Markov chain. We solve for the optimal allocation rule, which admits a simple implementation. Unlike with transfers, efficiency decreases over time, and both immiseration and its polar opposite are possible long-run outcomes. Considering the limiting environment in which time is continuous, we show that persistence hurts.
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Cowles Foundation Discussion Papers
We derive mean-unbiased estimators for the structural parameter in instrumental variables models with a single endogenous regressor where the sign of one or more first stage coefficients is known. In the case with a single instrument, there is a unique non-randomized unbiased estimator based on the reduced-form and first-stage regression estimates. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong. We show numerically that unbiasedness does not come at a cost of increased dispersion in models with a single instrument: in this …
Dynamic Moral Hazard Without Commitment, Johannes Hörner, Larry Samuelson
Dynamic Moral Hazard Without Commitment, Johannes Hörner, Larry Samuelson
Cowles Foundation Discussion Papers
We study a discrete-time model of repeated moral hazard without commitment. In every period, a principal finances a project, choosing the scale of the project and a contingent payment plan for an agent, who has the opportunity to appropriate the returns of a successful project unbeknownst the principal. The absence of commitment is reflected both in the solution concept (perfect Bayesian equilibrium) and in the ability of the principal to freely revise the project’s scale from one period to the next. We show that removing commitment from the equilibrium concept is relatively innocuous — if the players are sufficiently patient, …
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Unbiased Instrumental Variables Estimation Under Known First-Stage Sign, Isaiah Andrews, Timothy B. Armstrong
Cowles Foundation Discussion Papers
We derive mean-unbiased estimators for the structural parameter in instrumental variables models with a single endogenous regressor where the sign of one or more first stage coefficients is known. In the case with a single instrument, the unbiased estimator is unique. For cases with multiple instruments we propose a class of unbiased estimators and show that an estimator within this class is efficient when the instruments are strong. We show numerically that unbiasedness does not come at a cost of increased dispersion in models with a single instrument: in this case the unbiased estimator is less dispersed than the 2SLS …
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Estimating The Production Function For Human Capital: Results From A Randomized Control Trial In Colombia, Sarah Cattan, Emla Fitzsimons, Costas Meghir, Marta Rubio-Codina
Cowles Foundation Discussion Papers
We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children. We estimate production functions for cognitive and socio-emotional skills as a function of maternal skills and child’s past skills, as well as material and time investments that are treated as endogenous. The effects of the program can be fully explained by increases in parental investments, which have strong effects on outcomes and are complementary to both maternal skills and child’s past skills.
Identification- And Singularity-Robust Inference For Moment Condition Models, Donald W.K. Andrews, Patrik Guggenberger
Identification- And Singularity-Robust Inference For Moment Condition Models, Donald W.K. Andrews, Patrik Guggenberger
Cowles Foundation Discussion Papers
This paper introduces a new identification- and singularity-robust conditional quasi-likelihood ratio (SR-CQLR) test and a new identification- and singularity-robust Anderson and Rubin (1949) (SR-AR) test for linear and nonlinear moment condition models. Both tests are very fast to compute. The paper shows that the tests have correct asymptotic size and are asymptotically similar (in a uniform sense) under very weak conditions. For example, in i.i.d. scenarios, all that is required is that the moment functions and their derivatives have 2 + γ bounded moments for some γ > 0: No conditions are placed on the expected Jacobian of the moment functions, …
Nonlinear Pricing With Finite Information, Dirk Bergemann, Ji Shen, Yun Xu, Edmund M. Yeh
Nonlinear Pricing With Finite Information, Dirk Bergemann, Ji Shen, Yun Xu, Edmund M. Yeh
Cowles Foundation Discussion Papers
We analyze nonlinear pricing with finite information. A seller offers a menu to a continuum of buyers with a continuum of possible valuations. The menu is limited to offering a finite number of choices representing a finite communication capacity between buyer and seller. We identify necessary conditions that the optimal finite menu must satisfy, either for the socially efficient or for the revenue-maximizing mechanism. These conditions require that information be bundled, or “quantized” optimally. We show that the loss resulting from using the n -item menu converges to zero at a rate proportional to 1 = n 2 . We …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
What Do Longitudinal Data On Millions Of Hospital Visits Tell Us About The Value Of Public Health Insurance As A Safety Net For The Young And Privately Insured?, Amanda E. Kowalski
What Do Longitudinal Data On Millions Of Hospital Visits Tell Us About The Value Of Public Health Insurance As A Safety Net For The Young And Privately Insured?, Amanda E. Kowalski
Cowles Foundation Discussion Papers
Young people with private health insurance sometimes transition to the public health insurance safety net after they get sick, but popular sources of cross-sectional data obscure how frequently these transitions occur. We use longitudinal data on almost all hospital visits in New York from 1995 to 2011. We show that young privately insured individuals with diagnoses that require more hospital visits in subsequent years are more likely to transition to public insurance. If we ignore the longitudinal transitions in our data, we obscure over 80% of the value of public health insurance to the young and privately insured.
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Trade, Regulation, Productivity, And Preferences, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, emissions of the most common air pollutants from U.S. manufacturing fell by 60 percent, even as real U.S. manufacturing output grew substantially. This paper develops a quantitative model to explain how changes in trade, environmental regulation, productivity, and consumer preferences have contributed to these reductions in pollution emissions. We estimate the model’s key parameters using administrative data on plant-level production and pollution decisions. We then combine these estimates with detailed historical data to provide a model-driven decomposition of the causes of the observed pollution changes. Finally, we compare the model-driven decomposition to a statistical decomposition. The …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
Medicaid As An Investment In Children: What Is The Long-Term Impact On Tax Receipts?, David W. Brown, Amanda E. Kowalski, Ithai Z. Lurie
Medicaid As An Investment In Children: What Is The Long-Term Impact On Tax Receipts?, David W. Brown, Amanda E. Kowalski, Ithai Z. Lurie
Cowles Foundation Discussion Papers
We use administrative data from the IRS to examine the long-term impact of childhood Medicaid expansions. We use eligibility variation by cohort and state that we can relate to outcomes graphically. We find that children with greater Medicaid eligibility paid more in cumulative taxes by age 28. They collected less in EITC payments, and the women had higher cumulative wages. Our estimates imply that the government will recoup 56 cents of each dollar spent on childhood Medicaid by the time these children reach age 60. This return does not include estimated private gains from increased college attendance and decreased mortality.
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
The ‘Peter Pan Syndrome’ In Emerging Markets: The Productivity-Transparency Tradeoff In It Adoption, K. Sudhir, Debabrata Talukdar
The ‘Peter Pan Syndrome’ In Emerging Markets: The Productivity-Transparency Tradeoff In It Adoption, K. Sudhir, Debabrata Talukdar
Cowles Foundation Discussion Papers
Firms make investments in technology to increase productivity. But in emerging markets, where a culture of informality is widespread, information technology (IT) investments leading to greater transparency can impose a cost through higher taxes and need for regulatory compliance. This tendency of firms to avoid productivity-enhancing technologies and remain small to avoid transparency has been dubbed the “Peter Pan Syndrome.” We examine whether firms make the tradeoff between productivity and transparency by examining IT adoption in the Indian retail sector. We find that computer technology adoption is lower when firms have motivations to avoid transparency. Specifically, technology adoption is lower …
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Why Is Pollution From U.S. Manufacturing Declining? The Roles Of Environmental Regulation, Productivity, And Trade, Joseph S. Shapiro, Reed Walker
Cowles Foundation Discussion Papers
Between 1990 and 2008, air pollution emissions from U.S. manufacturing fell by 60 percent despite a substantial increase in manufacturing output. We show that these emissions reductions are primarily driven by within-product changes in emissions intensity rather than changes in output or in the composition of products produced. We then develop and estimate a quantitative model linking trade with the environment to better understand the economic forces driving these changes. Our estimates suggest that the implicit pollution tax that manufacturers face doubled between 1990 and 2008. These changes in environmental regulation, rather than changes in productivity and trade, account for …
A Simple Adjustment For Bandwidth Snooping, Timothy B. Armstrong, Michal Kolesár
A Simple Adjustment For Bandwidth Snooping, Timothy B. Armstrong, Michal Kolesár
Cowles Foundation Discussion Papers
Kernel-based estimators are often evaluated at multiple bandwidths as a form of sensitivity analysis. However, if in the reported results, a researcher selects the bandwidth based on this analysis, the associated confidence intervals may not have correct coverage, even if the estimator is unbiased. This paper proposes a simple adjustment that gives correct coverage in such situations: replace the Normal quantile with a critical value that depends only on the kernel and ratio of the maximum and minimum bandwidths the researcher has entertained. We tabulate these critical values and quantify the loss in coverage for conventional confidence intervals. For a …
Dynamic Panel Gmm With Near Unity, Peter C.B. Phillips
Dynamic Panel Gmm With Near Unity, Peter C.B. Phillips
Cowles Foundation Discussion Papers
Limit theory is developed for the dynamic panel GMM estimator in the presence of an autoregressive root near unity. In the unit root case, Anderson-Hsiao lagged variable instruments satisfy orthogonality conditions but are well-known to be irrelevant. For a fixed time series sample size (T) GMM is inconsistent and approaches a shifted Cauchy-distributed random variate as the cross section sample size n → ∞. But when T → ∞, either for fixed n or as n → ∞, GMM is √ T consistent and its limit distribution is a ratio of random variables that converges to twice a standard Cauchy …
A Simple Adjustment For Bandwidth Snooping, Timothy B. Armstrong, Michal Kolesár
A Simple Adjustment For Bandwidth Snooping, Timothy B. Armstrong, Michal Kolesár
Cowles Foundation Discussion Papers
Kernel-based estimators are often evaluated at multiple bandwidths as a form of sensitivity analysis. However, if in the reported results, a researcher selects the bandwidth based on this analysis, the associated confidence intervals may not have correct coverage, even if the estimator is unbiased. This paper proposes a simple adjustment that gives correct coverage in such situations: replace the Normal quantile with a critical value that depends only on the kernel and ratio of the maximum and minimum bandwidths the researcher has entertained. We tabulate these critical values and quantify the loss in coverage for conventional confidence intervals. For a …