Quarterly Journal of Economics articles from February 1995

Quarterly Journal of Economics archives from February 1995

Warm-glow versus cold-prickle: the effects of positive and negative framing on cooperation in experiments.
February 1, 1995... INTRODUCTION The fact that a large fraction of people voluntarily contribute to public goods, despite strong incentives to free ride, has been a long-standing puzzle for economists. This is true for economists studying public goods in the real...

Search at wholesale auto auctions.
February 1, 1995... One out of every three times, seller and buyer fail to trade at wholesale auto auctions. Instead, the seller exercises his right to refuse the winning bid. This paper shows how search theory can explain the sale rate and its variation across...

The effect of arrests on the employment and earnings of young men.
February 1, 1995... I. INTRODUCTION A large proportion of young men commit crime, and many of them are arrested. Wolfgang, Figlio, and Sellin [1972] estimated that almost 35 percent of all young men in Philadelphia were arrested by age eighteen. Tillman [1987]...

Myopic loss aversion and the equity premium puzzle.
February 1, 1995... I. INTRODUCTION There is an enormous discrepancy between the returns on stocks and fixed income securities. Since 1926 the annual real return on stocks has been about 7 percent, while the real return on treasury bills has been less than 1...

Word-of-mouth communication and social learning.
February 1, 1995... I. INTRODUCTION Economic agents must often make decisions without knowing the costs and benefits of the possible choices. Given the frequency with which such situations arise, it is understandable that agents often choose not to perform...

Inflation persistence.
February 1, 1995... The most popular model of sticky prices today is the overlapping wage contract model of Phelps [1978] and Taylor [1980]. While that model implies that prices are sticky, it also implies that the inflation rate is so flexible that monetary policy...

Relative-price changes as aggregate supply shocks.
February 1, 1995... I. INTRODUCTION What determines the rate of inflation? Most macroeconomists agree that, in the long run, the primary determinant of inflation is growth in the money supply. The short-run behavior of inflation, however, is more controversial....

Trade and circuses: explaining urban giants.
February 1, 1995... I. INTRODUCTION Over 35 percent of Argentina's population is concentrated in Buenos Aires, a city of 12 million inhabitants. What is it about countries such as Argentina, Japan, and Mexico that justifies their urban concentration when the...

Aggregate price indices, new goods, and generics.
February 1, 1995... INTRODUCTION Accounting for the introduction of new goods or of new varieties of old goods has always been a bit awkward in the construction of the cost-of-living index. The fact that new goods or varieties are available increases the...

Sticky prices: new evidence from retail catalogs.
February 1, 1995... I. INTRODUCTION Despite the central importance of the debate in macroeconomics over whether prices are flexible, there is very little direct evidence on how actual transaction prices evolve over time. For instance, in Gordon's [1990] recent...