You play rock-paper-scissors against someone. What is the best strategy? Of course, it depends of what your opponent does. If he is someone who always plays “rock”, then you better play “paper”. But if your opponent is not that naïve and searches for his best play, what would you do? The first thing to notice […]
This month I present the winner article of the Royal Economic Society Prize 2013 to the best non-solicited paper published in the Economic Journal. The authors are Pau Olivella and Marcos Vera-Hernández. One of the first predictions in the study of Economics of Information is the presence of the “adverse selection” phenomenon. The seminal paper […]
Economic models of perfect competition and of monopoly only need to include individual behavior that takes the environment as given. In the case of perfect competition, individual firms and consumers only need to know the prevailing market prices to decide their purchasing and production plans, whereas the monopolist needs to know the demand it faces […]
Every year, as the International Women’s Day approaches, a classic topic for the media is to summarize statistics related to the gender wage gap . The empirical evidence is overwhelming: differences between men and women in the labor market are persistent in all countries. If we look at Europe and US data in recent years […]
The literature of experimental economics has documented that individuals consistently make voluntary payments. Two methodological questions arise from this fact. First, which are the precise drivers of this pro-social behavior and, second, whether these findings can be extended to real life situations. Tobias Regner (2014) addresses these questions comparing theoretical and laboratory results with the […]
The most distinctive feature of modern economics is probably its reliance on the methodology of mathematical model building. The final aim of scientific model building is illuminating real phenomena; furthermore, models are basically logical arguments, whose main virtue is that they allow us to see very clearly what follows, and also what does not follow […]
I will end this survey of the main contributions to the economics of scientific knowledge (ESK) by discussing the works which attempt to offer a more or less systematic conception of the process of scientific discovery; in this entry, I will talk about ‘institutionalist’ theories, i.e., those that abstain from using mathematical models. The first […]
The relative wage of high-skilled to low-skilled workers began to increase in US manufacturing industries in the late 1980s, and this phenomenon was also observed in Mexico. At the same time, the US–Mexican trade as a percentage of US GDP increased dramatically during the same period. Does this mean that trade is behind the observed […]
Voice and exit are often alternative ways of exerting influence, but with regard to voting the exit option spells no influence; only voice can have an effect[…] A. Lijphart In polls many citizens express some dissatisfaction with politicians. Usual ways to voice this dissatisfaction in elections are absenteeism, spoiled or blank vote, or voting for […]
It is estimated that at least 860 million people live in slums, a number that has been growing by six million a year from 2000 to 2010 (UN-Habitat 2012) . The study of slums worldwide is a very complex problem. We have no good model to study their economic performance, no systematic data and no […]