Economic impacts of unionization on employers are difficult to estimate in the absence of large, representative data on establishments with union status information. Estimates are also confounded by selection bias, because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages. Using multiple…
I present key ideas and results from recent work incorporating " motivated " belief distortions into Economics, both at the individual level (overconfidence, wishful thinking, willful blindness) and at the social one (groupthink, team morale, market exuberance and crises). To do so I develop a flexible model that unifies much of this line of…
This article argues that the policy uncertainty generated by elections encourages private actors to delay investments that entail high costs of reversal, creating pre-election declines in the associated sectors. Moreover, this incentive depends on the competitiveness of the race and the policy differences between the major parties/candidates…
The number of prisoners incarcerated on drug-related offenses rose 15-fold between 1980 and 2000. This paper provides the first systematic empirical analysis of the implications of that dramatic shift in public policy. We estimate that cocaine prices are 5-15% higher today as a consequence of increases in drug punishment since 1985, presumably…
We study games with strategic complementarities, arbitrary numbers of players and actions, and slightly noisy payoff signals. We prove limit uniqueness: as the signal noise vanishes, the game has a unique strategy profile that survives iterative dominance. This generalizes a result of Carlsson and van Damme (Econometrica 61 (1993) 989-1018) for…
We introduce a model that extends the standard vote choice model to encompass text. In our model, votes and speech are generated from a common set of underlying preference parameters. We estimate the parameters with a sparse Gaussian copula factor model that estimates the number of latent dimensions, is robust to outliers, and accounts for zero…
The evolution of cooperation in nature and human societies depends crucially on how the benefits from cooperation are divided and whether individuals have complete information about their payoffs. We tackle these questions by adopting a methodology from economics called mechanism design. Focusing on reproductive skew as a case study, we show that…
We introduce and analyze expected uncertain utility (EUU) theory. A prior and an in- terval utility characterize an EUU decision maker. The decisionmaker transforms each uncertain prospect into an interval-valued prospect that assigns an interval of prizes to each state. She then ranks prospects according to their expected interval utilities. We…
We study the effects of deliberation on collective decisions. In a series of experiments, we vary groups' preference distributions (between common and conflicting interests) and the institutions by which decisions are reached (simple majority, two-thirds majority, and unanimity). Without deliberation, different institutions generate significantly…
Measurement error is ubiquitous in experimental work. It leads to imperfect statistical controls, attenuated estimated effects of elicited behaviors, and biased correlations between characteristics. We develop statistical techniques for handling experimental measurement error. These techniques are applied to data from the Caltech Cohort Study,…
The analysis of lab data entails a joint test of the underlying theory and of subjects' conjectures regarding the experimental design itself, how subjects frame the experiment. We provide a theoretical framework for analyzing such conjectures. We use experiments of decision making under uncertainty as a case study. Absent restrictions on subjects'…
Political and social polarization are a significant cause of conflict and poor gover-nance in many societies, thus understanding their causes is of considerable importance. Here we demonstrate that shifts in socialization strategy similar to political polarization and/or identity politics could be a constructive response to periods of apparent…
Previous research has investigated the effects of violence and warfare on individuals' well-being, mental health, and individual prosociality and risk aversion. This study establishes the short- and long-term effects of exposure to violence on short-term memory and aspects of cognitive control. Short-term memory is the ability to store information…
