infonet-economy

These days, it is common practice to base inference about the coefficients in a hetoskedastic linear model on the ordinary least squares estimator in conjunction with using heteroskedasticity consistent standard errors. Even when the true form of heteroskedasticity is unknown, heteroskedasticity consistent standard errors can also used to base valid inference on a weighted least…

This paper provides evidence of a novel facet of peer effects by showing how peer personality affects educational achievement. We exploit random assignment of students to university sections and find that students perform better in the presence of more persistent peers and more risk-averse peers. In particular, low-persistence students benefit from highly-persistent peers without…

Many studies document systematic gender differences in a variety of important economic preferences, such as risk-taking, competition and pro-sociality. One potential implication of this literature is that increased female representation in decision-making bodies may significantly alter organizational and policy outcomes. However, research has yet to establish a direct connection from…

Obese individuals have been shown to exhibit abnormal sensitivity to rewards and reward-predicting cues as for example food-associated cues frequently used in advertisements. It has also been shown that food-associated cues can increase goal-directed behavior but it is currently unknown, whether this effect differs between normal-weight, overweight, and obese individuals. Here, we…

Women are known to have stronger prosocial preferences than men, but it remains an open question as to how these behavioural differences arise from differences in brain functioning. Here, we provide a neurobiological account for the hypothesized gender difference. In a pharmacological study and an independent neuroimaging study, we tested the hypothesis that the neural reward system…

We show that a one-off incentive to bias advice has persistent effects. In an experiment, advisers were paid a bonus to recommend a lottery which only risk-seeking individuals should choose to a less informed client. Afterwards, they had to choose for themselves and make a second recommendation to another client, without any bonus. These advisers choose the risky lottery and…

This article is based on the presidential address delivered at the EEA Annual Congress 2016. It discusses China’s institutional and economic transformation through the lens of the model of growth and convergence developed in Acemoglu, Aghion, and Zilibotti (JEEA 2006), which emphasizes the dichotomy between investment- and innovation-led growth. The economic reforms introduced in the…

Unemployment varies across space and in time. Can attitudes toward work explain some of these differences? We study job search durations along the Swiss language border, sharply separating Romance language speakers from German speakers. According to surveys and voting results, the language border separates two social groups with different cultural background and attitudes toward work…

We document two facts. First, during the Great Recession, consumers traded down in the quality of the goods and services they consumed. Second, the production of low-quality goods is less labor intensive than that of high-quality goods. When households traded down, labor demand fell, increasing the severity of the recession. We find that the trading-down phenomenon accounts for a…