Department Brown Bag Seminars

Wednesday 12:00 noon 1:05 p.m.
499 Engineering II

 March 13
Jeffrey Butler, UC Merced
"Inequality as an Incentive"
Abstract:  We study the incentive effects of wage and earnings inequality in a laboratory experiment. We randomly assign wage levels on a real-effort task.  Across treatments, we exogenously vary information about wage and (experimental) income inequality as well as work content. In all treatments, we provide participants with subsequent opportunities to behave pro- or anti-socially. We specifically design all tasks to be ecologically valid. We formulate a novel hypothesis in which salient inequality provides positive incentives by differentially activating well-known cognitive processes, reducing shirking but also pro-sociality.

October 10
Brenda Samaniego de la Parra
"How Much is Formality Worth?"

October 17
Jon Robinson
"The Effect of Multiple Savings Accounts: Evidence from Malawi"
We test whether providing people with multiple labeled savings accounts affects savings decisions and downstream outcomes in a field experiment with 480 entrepreneurs in urban Malawi. In the experiment, treatment respondents received either one account or multiple accounts (up to 3), while a control group received nothing. We find that multiple accounts increased savings in treatment accounts by about 30%, and find some evidence that total savings increased by more among those given multiple accounts. We also find that savings accounts had sizeable effects on a number of outcomes, including labor supply, farming decisions, household expenditures, land purchases, credit extended to customers, and interpersonal transfers. However, we find no evidence that multiple accounts had larger downstream effects than single accounts. We speculate that incremental effect of an additional account would likely appear over a longer time period.

October 24
Christopher Rauh, University of Montreal
"Is Marriage for White People? Incarceration, Unemployment, and the Racial Marriage Divide"
During the last few decades, there has been a dramatic decline in marriage among blacks in the US. About 89% of black women between ages 25 and 54 were ever married in 1970. Today only 51% of them are. Wilson (1987) suggests that the lack of marriageable black men due to incarceration and unemployment is responsible for low marriage rates among blacks. In this paper, we take a dynamic look at the Wilson Hypothesis. We argue that the current incarceration policies and labor market prospects make black men much riskier spouses than white men. They are not only more likely to be, but also to become, unemployed or incarcerated than their white counterparts. We develop an equilibrium search model of marriage, divorce and labor supply that takes into account the transitions between employment, unemployment and prison for individuals by race, education, and gender. We calibrate this model to be consistent with key statistics for the US economy. We then investigate how much of the racial divide in marriage is due to differences in the riskiness of potential spouses. We find that differences in incarceration and employment dynamics between black and white men can account for half of the existing black-white marriage gap in the data.

October 31
Dan Friedman
"Revealed Preferences and General Equilibrium: A Laboratory Study"
Laboratory subjects choose from 25 different budget sets with a common endowment, and thereby reveal their preferences over bundles of goods (Arrow securities). Pair-replica economies constructed from these revealed preferences often have no (or have multiple) competitive equilibrium, as suggested by the classic Sonnenschein-Mantel-Debreu theorem. However, these ``pathologies" disappear when subjects are sorted into 12-person economies, including some which include only problematic (high convexity) revealed preferences. Actual trade in these economies using a tatonnement market institution closely tracks predictions in most markets, and the failures occur only in economies a priori deemed fragile to preference instability.

November 7
Rob Fairlie
"Experimental Evidence on Computer Assisted Learning in China"

November 14
Ariel Weinberger, University of Oklahoma
"The Welfare Benefits of Raising Your Standards"
Negotiations on modern trade agreements are increasingly focused on technical measures such as quality standards. We first examine the implications of quality standards on the reallocation of domestic sales. Guided by this evidence, we build a model of monopolistically competitive, heterogeneous firms, in which a quality standard forces low-quality firms to exit. Raising the quality standard can improve welfare if too many low-quality firms are present in the market allocation relative to the efficient allocation. We find that this is indeed the case in a general setting that encompasses various types of preferences, which provides a new rationale for technical measures that has not been accounted for in the previous literature. A reduction in trade costs reduces the optimal standard in a cooperative equilibrium across countries. We estimate the restrictiveness of standards across Chilean industries and find that in several instances the imposed standard is too restrictive relative to an upper bound for the standard predicted by the model. However, there is suggestive evidence that a rise in openness has reduced restrictiveness, which supports the efforts to improve agreements on technical measures along with traditional trade agreements.  

December 5
Bruce Meyer, University of Chicago