This article summarizes a review of the literature presented in Sacerdote (2011) . I thank Ricardo Mora for bringing it to my attention. The simplest model of behavioral genetics assumes that child outcomes (Y) are produced by a linear and additive combination of genetic inputs (G), shared environment (F) and unexplained factors (S). For instance […]
Competitive markets are efficient under a number of conditions. One is that the consumption or production of the commodity to be traded must not cause externalities. For instance, consider a group of firms polluting the atmosphere or the waters of a nearby river. The individual behavior is typically not sufficient to keep the pollution level […]
One of the aspects in which modern economics has departed further away from the neoclassical paradigm is the treatment of information after the seminal works of Akerlof, Spence and Stiglitz, who rightly won the Nobel prize for their contributions. Some theoretical models were introduced to explain economic phenomena that did not fit well in the […]
In 2012 the Nobel Memorial Prize in Economic Science was granted to two mathematicians, Lloyd Shapley and Alvin Roth, “ for the theory of stable allocations and the practice of market design”. The market design in their theory was not exactly a market, at least, not the kind one usually calls that way. They are […]
Until the 70’s of the last century there was a great divide in Economics. On the one hand, Microeconomics studied the individual economic behavior, whether of a firm or a consumer, and was able to construct a General Equilibrium Theory that explained remarkably well (at least, for a social science) many economic regularities like market […]
No one denies that there exist some forms of discrimination in the labor market and in many other places of our societies. There is, however, debate about the cause or causes of this discrimination and about the best ways to deal with it. Does discrimination start with some sort of education or social pressure that […]
A naïve application of simple economic models will predict that, as immigrants enter, the wages or the employment rate of native workers decrease. However, immigrants are not only workers, and they may bring with them entrepreneurship skills, so that they influence not only the supply side of the labor market, but the demand as well […]
To avoid any confusion regarding the object of study a disclaimer is in order. A statistical life is not a human life. The value of a human life is a concept that cannot be easily defined, if it can at all. I may value my life in such a way that I am willing to […]
When analyzing the economic consequences of copyright protection one must consider first how it affects the number and quality of the works that it protects; second, which are the effects on the availability of these works, and third, how are the benefits and costs shared by the different agents of the market (consumers, authors, producers […]
This is the ultimatum game: You are provisionally allocated USD10 with the following instructions. You have to decide a way to divide this money with another person. If she or he agrees, the division is carried out. If not, you both get nothing. What would you do? How would you react if you were the […]