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Keywords Tax evasion; Socio-economic networks; Game theory Abstract This paper builds on recent insights from network theory and on the rich dataset made available by the Panama Papers in order to investigate the micro-economic dynamics of tax-evasion. We model offshore financial entities documented in the Panama Papers as links between jurisdictions in the global network of tax evasion. A quantitative analysis shows that the resulting network, far from being a random collection of bilateral links, has key features of complex networks such as a core-periphery structure and a fat-tail degree distribution. We argue that these structural features imply that policy must adopt a systemic perspective to mitigate tax evasion. We offer three sets of insights from this perspective. First, we identify through centrality measures tax havens that ought to be priority policy targets. Second, we show that efficient tax treaties must contain exchange information clauses and link tax-havens to non-haven jurisdictions. Third, we show that the optimal deterrence strategies for a social-planner facing a strategic tax-evader in a Stackelberg competition can be characterized using the notion of Bonacich centrality. Author Affiliation: (a) Ca Foscari University of Venice and Paris 1 Pantheon-Sorbonne, France (b) Paris School of Economics and Paris 1 Pantheon-Sorbonne, France * Corresponding author. Article History: Received 3 November 2020; Revised 10 January 2022; Accepted 26 March 2022 (footnote)[white star] This project has received funding from the ITN ExSIDE European Union's Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 721846 and from the ITN EPOC European Union's Horizon 2020 research and innovation programme under the Marie Sklodowska-Curie grant agreement No 956107. Byline: Garcia Alvarado Fernando [fernando.garcia@unive.it] (a), Mandel Antoine [antoine.mandel@univ-paris1.fr] (*,b)

Keywords Household finance; Individual investor; Financial advice; Inducements; Consumer financial protection Highlights * German brokerage introduces a flat-fee alongside a commission-based scheme. * Comparison of switchers to the flat-fee to matched commission-based clients. * Adopters seek and follow (unchanged) financial advice more. * Adopters increase portfolio values and trade more. * Adopters improve portfolio efficiency through higher fund shares. Abstract Using a field study at a German brokerage, we investigate advised individual investors' behavior and outcomes after self-selecting into a flat-fee scheme (percentage of portfolio value) for mutual funds. In a difference-in-differences setting, we compare 699 switchers to propensity-score-matched advisory clients who remained in the commission-based scheme. Switchers increase their portfolio values, improve portfolio diversification, and increase their portfolio performance. They also demand more financial advice and follow more advisor recommendations. We argue that switchers attribute a higher quality to the unchanged advisory services. Author Affiliation: (a) Aarhus University, Fuglesangs Allé 4, DK-8210 Aarhus V, Denmark (b) University of New South Wales, UNSW Business School, Sydney, High St, Kensington NSW 2052, Australia (c) Goethe University Frankfurt, Theodor-W.-Adorno Platz 3, 60323 Frankfurt am Main, Germany * Corresponding author. Article History: Received 24 January 2022; Revised 14 March 2023; Accepted 16 March 2023 (footnote)â° This research could never have been accomplished without the collaboration and support of a German bank. We are grateful to the bank for providing the data. We would like to acknowledge the contributions of the bank and its employees who helped us. Financial support from the Think Forward Initiative research grant and the Danish Finance Institute (DFI) is also gratefully acknowledged. For useful comments and discussions, we thank Sascha Baghestanian, Holger Kraft, Roman Inderst, Martin Weber, Laura Lindsey, Alessandro Previtero, and Mikael Paaso. Conference and seminar comments at the AFA meetings in San Diego, AEA meetings in San Francisco, the 1st CEPR Household Finance workshop in London, the FIRS meetings in Lissabon, the DGF meetings in Leipzig, Goethe University Frankfurt, Leibniz University Hanover, University of Mannheim, and University of Tübingen significantly improved the paper. Please note that the paper previously circulated under the title 'fee-only advice' Byline: Steffen Meyer [steffen.meyer@econ.au.dk] (a,*), Charline Uhr (a), Benjamin Loos (b), Andreas Hackethal (c)

Keywords Relative performance information; Relative performance evaluation; Rank feedback; Social incentives; Social and self-image; Knowledge-sharing; On-the-job help; Collaboration; Experiment Abstract Social comparisons are known to increase individual work morale, but because they could foster competition, they may also negatively impact how well co-workers work together. This paper uses a novel experiment to explore this potential tradeoff. The experiment varies whether members of a reference group receive relative performance information on a knowledge task and measures how this affects the willingness to subsequently help the productivity of others by sharing knowledge with them. The findings reveal that relative performance information spurs competition between members of a reference group when compared to the baseline with no such information. Yet, there is no evidence that relative performance information substantially lowers group morale, that is, the willingness to help the productivity of others in the group. These findings advance our understanding of how relative performance concerns among co-workers affect the way they work together. Author Affiliation: Department of Economics, Ludwig-Maximilians-Universität München, Kaulbachstraße 45, 80539 München Article History: Received 15 July 2022; Revised 2 March 2023; Accepted 7 March 2023 (footnote)â° I am grateful to Roberto Weber and Ernst Fehr for their guidance and support in the development of this project. I thank Björn Bartling, Yves Breitmoser, Dirk Engelmann, Yiming Liu, Eva Ranehill, Ernesto Reuben, Karl Schlag, Florian Schneider, Anja Schöttner, Julien Senn, Vanessa Valero, Georg Weizsäcker, Florian Zimmermann and two anonymous referees for their comments. This paper also benefited from discussions with the audience in numerous conference and seminar presentations. Financial support from the Excellence Foundation Zurich, the Zurich Graduate School of Economics through their Director's Grant program and by Deutsche Forschungsgemeinschaft through CRC TRR 190 (project number 280092119) is gratefully acknowledged. All remaining errors are my own. Byline: Lea Heursen [lea.heursen@econ.lmu.de]

Keywords contest; all-pay auction; stochastic abilities; bid cap; disclosure Abstract In this paper, we study the optimal disclosure of bidders' types in a two-bidder all-pay auction in the presence of a common and exogenously given bid cap. We focus on the set of disclosure policies that are contingent on realizations of bidders' types and fully characterize the unique symmetric equilibrium under each of them. We find that, allowing only for full disclosure and full concealment, the ex ante expected revenue is higher under full disclosure only for intermediate levels of the bid cap. Allowing also for partial disclosure policies: (i) the ex ante expected revenue under full disclosure is higher than under partial disclosure to low-type bidders but lower than under partial disclosure to high-type bidders, regardless of the bid cap; (ii) full concealment could rank from the highest to the third highest, depending on the bid cap, the prior type distribution, and the type values. These results are due to the different sensitivities of bidders' bids across bidders' types and disclosure policies. Author Affiliation: (a) School of Economics, Shenzhen University, China (b) Department of Economics, Shenzhen MSU-BIT University, China (c) Max Planck Institute for Tax Law and Public Finance, Germany * Corresponding author. Article History: Received 3 December 2020; Revised 23 September 2022; Accepted 2 October 2022 (footnote)[white star] We thank Bo Chen, Jingfeng Lu, Kai Konrad, Dmitriy Knyazev, Tsz-Ning Wong, and Lily Yang for comments and discussions. This work was supported by the National Natural Science Foundation of China [No. 72203148 and No. 71973040] and the Department of Education of Guangdong Province [No. 2021WQNCX085]. The authors have equal contribution to the paper. Byline: Bo Chen [bochenbonn@gmail.com] (a,b,*), Marco Serena [marco.serena85@gmail.com] (c)

Keywords Cheating; Dishonesty; Misreporting in teams; Real effort Highlights * We analyze the impact of information and communication on misreporting of performance in teams of two. * Both team members get the same payoff but report independently. * Informing players 2 about the reports of players 1 reduces misreporting. * Letting players 1 send messages to players 2 reduces misreporting by players 2. * Information transmission and communication thus reduce misreporting. Abstract We extend the experimental analysis of misreporting performance in real effort tasks (cheating) to situations where two members of a team perform the task sequentially and decide independently on their potentially inflated reports. We vary three factors in our experiment: whether no players, only players 2, or both players can misreport; whether players 2 learn the report of players 1; and whether players 1 can send a message to players 2 requesting honest or dishonest behavior. Our data yield two main insights. First, higher reports by players 1 lead to higher reports by players 2, i.e. misreporting is reinforcing. Second, allowing players 1 to send a message suggesting that players 2 either report honestly or a minimum number of correct solutions reduces misreporting by players 2. There are two channels for this. First, most players 1 request an honest report. Second, players 2 misreport far less when they receive the honest message, but, compared to the treatments without messages, hardly change their reports when they are asked to report a minimum number of correct solutions. We find a similar, though less pronounced, asymmetric response when players 2 learn the reports of players 1. These findings suggest that communication and information transmission can reduce cheating, and that there are notable spillover effects of honesty even in anonymous environments. Author Affiliation: (a) Victoria University of Wellington, Pipitea Campus, Lambton Quay, Wellington, New Zealand (b) Trier University, Universitätsring 15, Trier, D-54296, Germany (c) Graduate School of Business, HSE University, Shabolovka Ulitsa 26--28, Moscow, Russia * Corresponding author. Article History: Received 26 April 2022; Revised 20 March 2023; Accepted 26 March 2023 (footnote)[white star] Paper presented at the University of Auckland, the University of Bern, Victoria University of Wellington, Otto Beisheim School of Management, and European Business School. We are grateful to Frauke von Bieberstein, Steffen Lippert, Gerd Muehlheusser, and Ronald Peeters for helpful comments. We are very grateful to two anonymous referees and the Associate Editor, whose comments improved the paper very much. This study was supported by grants of the Russian Science Foundation (Project No. 20-78-00023) and Wellington School of Business and Government (Project No. FSRG 225754). Byline: Eberhard Feess [eberhard.feess@vuw.ac.nz] (a), Thomas Schilling [dudek@uni-trier.de] (b), Yuriy Timofeyev [y.timofeyev@hse.ru] (*,c)

Keywords Intervivos transfers; Bequests; Coresidency; Parental altruism Abstract This paper uses 1996--2014 longitudinal HRS data to establish the relative importance of intervivos transfers, bequests and coresidency in the United States. We find that when computing the relative importance of intervivos transfers versus bequests, the aggregate perspective that pools all data into a single cross-section is very different than the parent-level longitudinal perspective, highlighting the special value of panel data. This difference reflects the fact that large bequests are highly concentrated and play an influential role at the aggregate level, while at the micro parent-level, intervivos transfers constitute the main form of financial support for most parents. Regarding coresidency, we find that although older children and parents tend to coreside when the child is helping the parent, coresidency tends to be more prevalent among poorer, younger parents and their children. Children who ever coreside with parents also receive larger total intervivos transfers. Author Affiliation: (a) Center for Transnationals' Studies & Laboratory for Economic Behaviors and Policy Simulation, Nankai University, Tianjin, China (b) Department of Economics, University of Pittsburgh, United States * Corresponding author. Article History: Received 27 July 2021; Revised 31 December 2022; Accepted 6 February 2023 (footnote)1 A previous version of this paper circulated under the title 'The Patterns of Intervivos Transfers to Adult Children.' We thank the editor and two anonymous referees for insightful comments. Siqiang Yang acknowledges financial support from Tianjin Philosophy and Social Science Planning Foundations (TJYJQN22-003) and the Fundamental Research Funds for the Central Universities (No. 63202020). Byline: Siqiang Yang [siy10@nankai.edu.cn] (a), Marla Ripoll [ripoll@pitt.edu] (*,1,b)

Keywords Optimal currency denominations; Cash transactions; Burden of exchanging cash; Penny elimination Highlights * We describe a model of optimal consumer-merchant exchange of cash payments. * Diary data are used to quantify the burden of exchanging currency notes and coins. * The model and data are used to analyze the effects of eliminating the one-penny coin. * Penny elimination would reduce the burden of exchanging cash. * Penny elimination would result in little or no inflationary consequences. * Elimination of the penny and the nickel would not reduce this burden relative to penny elimination only. Abstract This article quantifies the burden of exchanging currency notes and coins using a model of optimal consumer-merchant exchange of cash payments and consumer payment choice diary data. The model is then applied to analyze a policy debate whether to eliminate the penny coin from circulation. We find that penny elimination would reduce the burden of exchanging cash and will not have any significant inflationary consequences caused by price rounding. Surprisingly, a removal of both the penny and nickel coins from circulation would slightly increase (not decrease) the burden relative to penny elimination only. Author Affiliation: (a) Department of Economics, Washington University in St. Louis. 1 Brookings Dr, St. Louis, MO, 63130, United States (b) Research Department, Federal Reserve Bank of Atlanta. 1000 Peachtree St. NE, Atlanta, GA, 30309, United States * Corresponding author. Article History: Received 15 February 2022; Revised 25 January 2023; Accepted 27 January 2023 (footnote)[white star] We thank Marcin Hitczenko and two anonymous reviewers for most helpful comments and suggestions. This paper was formerly circulated as 'The Burden of Cash and the Penny Policy Debate.' Part of the work on this paper was conducted while Brian Prescott was at the research department of the Federal Reserve Bank of Atlanta. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Byline: Brian C. Prescott [b.prescott@wustl.edu] (a), Oz Shy [oz.shy@atl.frb.org] (*,b)

Keywords Preference; Decision-making autonomy; Willingness-to-pay Highlights * Spouses in low-income societies engage in division of labor. * Improved cookstoves benefit women more than men. * Women are willing to pay more for improved cookstoves than men. * Men dominate household decision-making. Abstract We use a field experiment to identify how differences in preferences and spousal influence result in low willingness to pay (WTP) for technologies that can benefit all household members. We create income-earning opportunities to empower households and conduct an actual stove purchase experiment to elicit their WTP for fuel, time, and indoor air pollution-reducing improved cookstoves. The decision to buy the stove was randomly assigned to either wives, husbands, or couples using either individually or jointly earned income. Experimental results suggest that wives, who often are responsible for cooking and collecting fuelwood, are willing to pay 57% more than husbands and 39% more than couples. Wives who made the stove purchase decision alone using the income they earned alone are willing to pay 67% more than husbands who made the purchase decision alone. We also find that couples' WTP is similar to that of husbands, implying that husbands dominate joint decisions. A follow-up survey conducted 15 months after the stove purchase shows that the treatments do not affect stove use. Our findings highlight the importance of considering the division of labor, preference difference, and spousal influence within the household when promoting the adoption of new household technologies. Improving access to cash for poor women would likely enable them to make decisions consistent with their preferences. Author Affiliation: (a) University of Gothenburg, Vasagatan 1, Box 600 405 30, Gothenburg, Sweden (b) ECRC, Vasagatan 1, Box 600 405 30, Gothenburg, Sweden * Corresponding author. Article History: Received 19 March 2021; Revised 16 January 2023; Accepted 24 January 2023 (footnote)[white star] Yonas Alem (Lead Author) is a Senior Research Fellow and Director of Academic Programs at the Environment for Development (EfD), School of Business, Economics and Law, University of Gothenburg; his email address is yonas.alem@gu.se. Sied Hassen is a post-doctoral researcher at the Environment and Climate Research Center of the Policy Studies Institute (PSI), Addis Ababa, Ethiopia; his email address is seidy2004@gmail.com. Gunnar Köhlin is Director of EfD at the School of Business, Economics, and Law at the University of Gothenburg; his email address is gunnar.kohlin@gu.se. We thank the editor (Laura Schechter), an anonymous associate editor, and two anonymous reviewers for helpful inputs, which significantly improved the paper. We also extend our gratitude to Cyndi Berck, the late Peter Berck, Randall Bluffstone, Fredrik Carlsson, Haileselassie Medhin, Alemu Mekonnen, Subhrendu Pattanayak, Dale Whittington, Thomas Sterner, Simon Schürz, Måns Söderbom, Roberto Weber, seminar participants at the Department of Economics, University of Gothenburg (Gothenburg, Sweden), participants in the Economic Sciences Association annual conference (Bergen, Norway), and participants at the Nordic Conference in Development Economics (Copenhagen, Denmark) for helpful comments on earlier versions of the paper. Financial support from the Swedish International Development Cooperation Agency (Sida) through the Environment for Development (EfD) is gratefully acknowledged. All correspondence to Yonas Alem, yonas.alem@gu.se. All errors and omissions are ours. Byline: Yonas Alem [yonas.alem@economics.gu.se] (*,a), Sied Hassen (b), Gunnar Köhlin (a)

Keywords Cooperation; Social identity; Noisy identity; Pure altruism; Prisoners' Dilemma Highlights * This paper studies a model where players want to cooperate only with ingroups due to pure altruism. * Identity is noisy, so players may end up benetting an outgroup or hurting an ingroup. * When players interact at least twice, there is more cooperation with more noise than without, even if cost is high. * With noisy identity, repetition unlocks welfare gains that are not pos- sible without noise. * Making outgroups easier to recognize can make interactions more unso- ciable. Abstract When meeting a random stranger, it can be difficult to recognize who is like you (ingroup) and who is not (outgroup). I construct a model to explore how noise in detecting whether the other player is an ingroup or an outgroup impacts overall cooperation in strategic interactions. When the game is repeated, noisy identity can generate welfare gains that are not possible with perfect recognition by encouraging players to cooperate in all periods except the last one, regardless of how they identified the opponent. Importantly, noisy identity can sustain additional cooperation even when the potential cost of doing so is high. This result is largely driven by the level of noise in detecting who is an outgroup, whereas the role in recognizing an ingroup is less prominent. Author Affiliation: Department of Economics, University of Memphis, 427 Fogelman Admin Building, Memphis, Tennessee 38152, United States * Corresponding author. Article History: Received 29 April 2022; Revised 2 January 2023; Accepted 8 January 2023 (footnote)1 The author has benefited from insightful comments from John Nachbar, David Levine, Yuri Khoroshilov and three anonymous referees. This research did not receive any specific grant from funding agencies in the public, commercial or not-for-profit sectors. The current version of this work stems from an earlier presented working paper entitled Kin Targeted Altruism with Noise. All errors are my own. Byline: Carmen Astorne [cmstrnfg@memphis.edu] (*,1)

Keywords artificial intelligence; big data; Cyber-Communism; economic calculation; Ludwig von Mises Abstract In his 1920 essay 'Economic Calculation in the Socialist Commonwealth,' Ludwig von Mises argued that economic calculation is impossible in a socialist system absent private property and exchange in the means of production. Without the social appraisement process by which the actions of consumers and entrepreneurs produce a money price structure, the commensurate cardinal numbers necessary to engage in capital accounting are not available. We argue that any claims regarding how advances in computer technology can solve the problem of economic calculation are based on an insufficient understanding of Mises' original argument. We restate Mises' argument in consideration of recent developments in big data and artificial intelligence and argue that Mises' original argument concerning the impossibility of economic calculation absent the institutional prerequisites of private property and monetary exchange in goods of all orders remains unrefuted. Author Affiliation: (a) George Mason University (b) Montreat College * Corresponding author: Article History: Received 13 July 2022; Revised 8 December 2022; Accepted 13 December 2022 (footnote) The authors would like to thank participants of the February 2022 Modern Computing and Economic Calculation Online Papers Workshop, generously hosted by the Institute for Humane Studies, as well as two anonymous referees for valuable feedback. Karras would also like to thank Daniel B. Klein, Erik W. Matson, and participants of the spring 2022 George Mason University Adam Smith Program Research Workshop for their helpful comments on an earlier version of this paper. Byline: Karras J. Lambert [klamber7@gmu.edu] (a,*), Tate Fegley [tate.fegley@montreat.edu] (b)

Keywords Inequality; Socioeconomic status; Conspicuous consumption; Veblen goods; Access to credit Abstract The quest for status is a powerful motivator, but does it affect inequality? This paper presents a novel lab experiment that was designed and conducted to identify the relationship between conspicuous consumption, access to credit, and inequality. We report four main findings: First, consumption increases when it is 'conspicuous' (i.e., is both observable and signaling ability). Second, costly borrowing increases when consumption is conspicuous. Third, the increase in costly borrowing is driven by those at lower income levels. Finally, in the presence of conspicuous consumption, access to credit exacerbates inequality. Author Affiliation: (a) University of East Anglia, UK (b) International Monetary Fund, USA * Corresponding author. Article History: Received 10 March 2022; Revised 22 October 2022; Accepted 5 December 2022 (footnote)1 We are extremely grateful for support from Katarina Dankova, Phoebe Melvin, and James Merewood. This research is funded by the World Bank's Strategic Research Programs (TF0A1139). We thank Rabah Arezki, Leonardo Bursztyn, Bob Cull, Laura Harvey, Steffen Huck, Philip Keefer, Martin Kanz, Boon Han Koh, Erzo Luttmer, Vijayendra Rao, Roman Sheremeta, Editor Daniel Houser, an Associate Editor, two anonymous reviewers, and participants at the Center for Behavioral and Experimental Social Science seminar series at the University of East Anglia, the EasternArc Experimental Workshop at the University of Essex, and the Applied Development Economics seminar series at the Lahore School of Economics for thoughtful comments and suggestions. The views expressed in this paper are those of the authors and do not necessarily represent the views of the IMF, its Executive Board, or IMF Management. Byline: Sheheryar Banuri [s.banuri@uea.ac.uk] (a,*), Ha Nguyen (b,1)

Keywords Behavioral inequality; Human capital investment; Behavioral bias; Intergenerational mobility Highlights * Socio-economic (job and education) background shapes perceived efficacy. * Agents underestimate the probability of intergenerational mobility. * We build a theoretical model to capture macroeconomic implications of such beliefs. * Biases may influence under confident parents to over invest in education. * The biases may lower income inequality. Abstract This paper introduces perceived self-efficacy beliefs in an overlapping generations model and studies the effects of behavioral anomalies on human capital investments and aggregate inequality. These beliefs are not inherent but based on a person's socio-economic background. Ex ante children are homogeneous, but parents are biased about the returns to their children's education. Based on parental education and job status, parents may be over or under confident but otherwise, they are rational. We witness spillover effects that shift the incentives to educate children from the pessimistic parents to unbiased parents. Biases may induce or hinder investment. Over investment by one parent type may even crowd-out investments of other parent types. We find interesting effects of biases on the aggregate economy when parental warm glow is not low. Author Affiliation: (a) Jindal Global Business School, O.P. Jindal Global University, Sonepat, Haryana 131029, India (b) Ashoka University, Plot 2 Rajiv Gandhi Education City, Sonepat, Haryana 131029, India * Corresponding author. Article History: Received 26 December 2020; Revised 30 July 2022; Accepted 1 August 2022 (footnote)[white star] An earlier version of this paper was titled 'The Glasses are Tinted: Self-Confidence and Poverty Trap'. We acknowledge useful comments from an anonymous referee, Mausumi Das, Sayantan Ghosal, Parikshit Ghosh, Ajit Mishra, Dilip Mookherjee, Abhiroop Mukhopadhyay, Tridip Ray, Prabal Roy Chowdhury, Sudipta Sarangi, and Arunava Sen and participants of Delhi Theory Workshop at Indian Statistical Institute and seminar participants at Delhi School of Economics and Indian Statistical Institute, Delhi. Dyotona Dasgupta acknowledges postdoctoral fellowship funding jointly provided by the Centre for Development Economics, Delhi School of Economics and the Institute of Economic Growth during 2019-20. All errors are our own. Byline: Dyotona Dasgupta [dasgupta.dyotona@gmail.com] (*,a), Anuradha Saha [anuradha.saha@ashoka.edu.in] (b)

Keywords Electoral cycles; Political selection; Voting; Macroeconomic forecasting Abstract This paper documents the existence of electoral cycles in GDP growth forecasts released by governments. In a theoretical model of political selection, we show that governments release overly optimistic GDP growth forecasts ahead of elections to increase the reelection probability. The bias arises from lack of commitment if voters are rational and from manipulation of voters' beliefs if they do not expect the incumbent to be biased. Using high-frequency forecaster-level data from the United States, the United Kingdom, and Sweden, we document that governments overestimate short-term real GDP growth by 0.1--0.3 percentage points. Author Affiliation: (a) Department of Economics and Finance, Università Cattolica del Sacro Cuore, Uppsala Centre for Fiscal Studies, Uppsala University, CESifo, CIFREL, Largo A. Gemelli 1, Milan 20123, Italy (b) Payments Department, Sveriges Riksbank and Uppsala Centre for Fiscal Studies, Uppsala University, Sveriges Riksbank, Stockholm SE-103 37, Sweden * Corresponding author. Article History: Received 7 September 2021; Revised 18 July 2022; Accepted 11 August 2022 (footnote)[white star] We would like to thank the editor Daniela Puzzello, an anonymous associate editor, and an anonymous referee as well as Eva Mörk and Mikael Carlsson for extensive feedback. We would also like to thank Enghin Atalay, Alessandra Bonfiglioli, David Cesarini, Matz Dahlberg, Sirus Dehdari, Mikael Elinder, Peter Fredriksson, Nils Gottfries, Georg Graetz, Christoph Hedtrich, Sebastian Jävervall, Mathias Klein, Jesper Lindé, Torben Mideksa, Gisle Natvik, Oskar Nordström Skans, Sven Oskarsson, Vincent Pons, Luca Repetto, Olli Ropponen, Johanna Rickne, Uta Schönberg, Anna Seim, Anna Thoresson, Janne Tukiainen, Erik Öberg, and the participants at seminars held at Uppsala University, Uppsala Centre for Fiscal Studies (UCFS), Università Cattolica del Sacro Cuore, the 76 th Annual Congress of the International Institute of Public Finance (IIPF), the 35 th Annual Congress of the European Economic Association (EEA), and the 33 rd Annual Congress of the Italian Society of Public Economics (SIEP) for their dialogues and comments. Financial support from Handelsbankens Forskningsstiftelser is gratefully acknowledged. The views expressed in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of Sveriges Riksbank. Byline: Davide Cipullo [davide.cipullo@unicatt.it] (*,a), André Reslow [andre.reslow@riksbank.se] (b)

Keywords Agenda setting; Media; Kidnapping; Terrorism; FARC Abstract This paper suggests news coverage of a proposed prisoner exchange program (the Acuerdo Humanitario/AH) systematically affected FARC (Revolutionary Armed Forces of Colombia) operations in the early 2000s. We propose AH news raised the value of political kidnappees through an agenda-setting-type mechanism. Our identification strategy draws on disaster deaths in countries favored by Colombian emigrants as an instrumental variable for AH news. Findings suggest AH coverage increased the number of political kidnappings, while decreasing the number of financial kidnappings. Overall, a simple back-of-the-envelope calculation implies AH news de-escalated the conflict in the short run. Author Affiliation: (a) University of Western Australia, 35 Stirling Highway, Crawley 6009, WA Australia (b) University of Western Australia, Centre for Business Data Analytics (UWA), IZA (Bonn), and CESifo (Munich), 35 Stirling Highway, Crawley 6009, WA Australia * Corresponding author. Article History: Received 20 November 2021; Revised 25 July 2022; Accepted 28 July 2022 (footnote)[white star] We are grateful to Camilo Jaramillo and Sebastian Sierra for excellent research assistance. We thank the editor Scott Adams and two anonymous referees for valuable comments that have greatly helped us to improve the paper. We are greatly indebted to Tushar Bharati, Marcel Garz, Christopher Parsons, and Francisco Pitthan for excellent conversations and comments. Seminar participants at the Universidad EAFIT, the University of Western Australia, the Applied Young Economist Webinar at Monash University, and the Bolivian Conference on Development Economics provided helpful comments and discussions. Juan P. Aparicio is thankful to the Australian Government and the University of Western Australia for funding from the Research Training Program (RTP) scholarship. Byline: Juan P. Aparicio [juposada93@gmail.com] (*,a), Michael Jetter [mjetter7@gmail.com] (b)

Keywords Information; Biased beliefs; Career preferences; Science; Higher education Abstract We investigate whether biased beliefs play a role in the persistent demand for postdoctoral training in science. We elicit the beliefs and career preferences of doctoral students at 56 U.S. chemistry departments through a survey combined with a field experiment, in which we randomize the provision of information to a subset of respondents on historical academic placements by department. We first show that respondents have excessively optimistic beliefs about their own and their peers' chances of obtaining a tenure track faculty position. Respondents who received the historical placement information treatment updated their beliefs about their own likelihood of obtaining a faculty position in a follow-up survey one year later, particularly those who had the most biased initial beliefs. However, we do not find an effect on the likelihood of doing a post-doc at four years post-intervention. Author Affiliation: (a) Department of Economics, University of Massachusetts Amherst, United States (b) School of Economics, University of Bristol, United Kingdom (c) CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Science, Czech Republic * Corresponding author. Article History: Received 7 February 2022; Revised 2 July 2022; Accepted 21 July 2022 (footnote)[white star] We thank Sandro Ambuehl, Michal Bauer, Albert Bravo Biosca, Donna Ginther, Stepan Jurajda, Nicola Lacetera, Mario Macis, Nikolas Mittag, Henry Sauermann, Paula Stephan, Hubert Wu, Basit Zafar and conference participants at the NBER Summer Institute, CERGE-EI, Max Planck Institute, the IGL Winter Research meeting, the Swiss Economists Abroad Association, CUNY Queens, and the University of Connecticut for helpful comments. We appreciate research assistance from Samantha Blaney. Gaulé and Vuletic Cugalj acknowledge financial support from the Czech Science Foundation (GACR grant no 16-05082S). Ganguli acknowledges support from the W.E. Upjohn Institute for Employment Research. This study has been approved by the University of Massachusetts Amherst IRB and was pre-registered in the AEA RCT Registry (AEARCTR-0003212). This paper uses confidential survey data collected by the authors, which they are unable to publicly share. The authors will provide an anonymized dataset and code to assist interested researchers with replication of the tables and figures in the paper. Byline: Ina Ganguli (a), Patrick Gaulé [pgaule@cerge-ei.cz] (b,*), Danijela Vuletic Cugalj (c)

Keywords Organ transplantation; Markets; Altruism; Giving Abstract In 2007 we published a paper on organ transplants that used data from 1990--2005. We proposed a radical solution of paying individuals to donate kidneys, and claimed that this would clean out the waiting list for kidney transplants in a short period of time. In this paper, we revisit the topic, and examine 14 years of additional data to see if anything fundamental has changed. We show that the main altruistic based policies implemented, such as kidney exchanges or opt out systems for organ procurement, have been unable to solve the problem of shortages. Our analysis suggests that, because of the reaction of direct living donors to increases in other sources of donations, the supply curve of kidney transplants is highly inelastic to altruistic policies. In contrast, a market in organs would eliminate organ shortages and thereby eliminate thousands of needless deaths. Author Affiliation: (a) University of Chicago and Hoover Institution, 1126 E. 59th Street, Chicago, IL 60637, United States (b) Universidad del CEMA, Argentina, and JILAEE, Av. Cordoba 374, Buenos Aires 1426, Argentina (c) Queen's University and JILAEE, Dunning Hall, Room 316, 94 University Avenue, Kingston, Ontario K7L 3N6, Canada * Corresponding author. Article History: Received 21 February 2021; Revised 19 June 2022; Accepted 7 August 2022 (footnote)[white star] We are very grateful for very helpful comments of two anonymous referees. We also benefited from comments from Scott Kominers, Casey Mulligan, and Alejandro Rodriguez, as well as by attendees of presentations at the Law and Economics Workshop and the MacLean Center's Seminar Series of the University of Chicago. We thank Leandro Nallar for excellent research assistance. (footnote) We started working on this paper together with Gary Becker in 2011. In 2012, we presented the paper at the Law and Economics Workshop and the MacLean Center's Seminar Series of the University of Chicago. The paper was unfinished when Becker passed away in May 2014. In this version of the paper, we updated the data and made some additions. The paper preserves all the economic analysis that was developed in the last version that we collaborated with Becker. Becker wrote his first article about the organ shortage in 1997, as part of his monthly BusinessWeek Column. The article was entitled How Uncle Sam Could Ease the Organ Shortage. In the article, he 'suggest(s) considering the purchase of organs only because other modifications to the present system so far have been grossly inadequate to end the shortage.' In the 2000s, Julio Elias collaborated with Becker in a paper that uses the economic approach to analyze the consequences of legalizing the purchase and sale of kidneys for transplants from both deceased and living donors. In 2014, Becker published with Julio Elias a column in the Saturday Essay section of the Wall Street Journal entitled Cash for Kidneys: The Case for a Market for Organs. For Becker, the problem of the organ shortage and finding ways to solve it was a lifelong project. This paper reflects some of his last thoughts on this problem. Byline: Gary S. Becker (a), Julio Jorge Elias [je49@ucema.edu.ar] (b,*), Karen J. Ye (c)

Keywords Compliance; Civic capital; COVID-19 policy response; Stay-at-home orders; Regression kink design Abstract We show that compensation measures aimed at improving the fairness of a crisis policy response can unintendedly nudge compliance with emergency rules. We combine information on the distribution of relief funds across Italian municipalities during the novel coronavirus pandemic with data tracking citizens' movements through mobile devices and navigation systems. To assess the impact of transfers on compliance, we exploit a sharp kink schedule in the allocation of funds. The empirical analysis provides evidence that compliance increased with transfers, suggesting that the observance of emergency rules also depends on the fairness of the pandemic policy response. Author Affiliation: (a) University of Cagliari and CRENoS, Italy, and University of Essex, UK (b) European Commission, Joint Research Centre (JRC) Ispra, Italy (c) University of Pavia, Italy (d) Sapienza University of Rome, Italy, and IZA, Bonn, Germany * Corresponding author. Article History: Received 3 September 2021; Revised 9 August 2022; Accepted 12 August 2022 (footnote)[white star] We are grateful to two anonymous referees whose comments and suggestions helped us to improve the paper substantially. The paper also benefited from the feedback from Emanuele Brancati, the audience of the 17th Conference of the European Society for Population Economics, and seminar participants at Sapienza University of Rome, University of Bergamo, and University of Pavia. Byline: Claudio Deiana [claudio.deiana@unica.it] (a), Andrea Geraci [andrea.geraci@unipv.it] (*,b,c), Gianluca Mazzarella [gianluca.mazzarella@unimi.it] (b), Fabio Sabatini [fabio.sabatini@uniroma1.it] (d)

Keywords Homelessness; Mental health; Depression; Anxiety; Mixed proportional hazard model Highlights * This paper uses data from the Australian Journeys Home survey, a sample of disadvantaged Australians. * It studies the relationship between early mental health episodes and early homelessness, focusing on depression and anxiety. * We find that a person's first episode of depression makes a transition to homelessness more likely for both men and women. * Men's first experience of homelessness increases the likelihood of anxiety disorders. * - Anxiety disorders have no effect on homelessness and homelessness has no effect on the likelihood of developing depression. Abstract This paper studies the relationship between early mental health episodes and early homelessness, focusing on depression and anxiety amongst disadvantaged Australians. Using data from the Australian Journeys Home survey, we investigate whether the early onset of mental health conditions make a first transition into homelessness more likely. Similarly, we analyze whether early experiences of homelessness increase the likelihood of early onset of depression or anxiety. We perform our analysis separately for men and women since there are gender differences in rates of both mental health diagnosis and homelessness. After accounting for the effects of joint observed and unobserved determinants, we find that a person's first episode of depression makes a transition to homelessness more likely for both men and women. In contrast, anxiety disorders have no effect on the likelihood of experiencing homelessness. In addition, people's first experience of homelessness has no effect on the likelihood of developing depression, but does increase the likelihood of anxiety disorders for men only. Author Affiliation: (a) Melbourne Institute: Applied Economic & Social Research, University of Melbourne, Australia (b) Erasmus School of Economics and Tinbergen Institute, Erasmus University Rotterdam, the Netherlands (c) Department of Economics, University of Melbourne, Australia (d) IZA, Bonn, Germany (e) CEPR, London, United Kingdom (f) The Life Course Centre, University of Queensland, Australia * Corresponding author. Article History: Received 30 November 2021; Revised 9 August 2022; Accepted 12 August 2022 Byline: Julie Moschion [moschion@unimelb.edu.au] (a,d,f,*), Jan C. van Ours (b,c,d,e)

Keywords Imperfect information; Learning by doing; Technology adoption Abstract Information problems are pervasive in developing economies and can hinder productivity growth. This paper studies how much rural producers in developing countries can learn from their own cultivation experience, i.e. learning by doing, to redress important information gaps about imperfectly known input technologies. First, I build a theoretical model which links learning by doing in one period to improved input choices in the next period, and show that this can be impeded by uncertainty about what is being observed due to noisy cultivation signals and by uncertainty about what to infer about market varieties due to imperfect variety integrity. Second, I apply this framework to cotton farmers in Pakistan, where farmers have imperfect information prior to cultivation about the extent to which their seeds have pest resistant biotechnology. The results suggest that farmers are unable to learn by doing about this aspect of their seeds due to a high degree of noise in cultivation signals. The paper highlights the potential difficulties in parsing out and processing information from cultivation experience alone and therefore of learning by doing by rural producers in a development context. Author Affiliation: (a) Department of Economics and CeMIS, University of Göttingen, Germany (b) Department of Economics, University of Massachusetts Amherst, United States Article History: Received 23 September 2021; Revised 15 June 2022; Accepted 6 July 2022 (footnote)[white star] I am grateful to James Heintz, Daniele Girardi, Peter Skott, Emily Wang, Ina Ganguli, Arslan Razmi, Mariam Majd, Sebastian Vollmer, and participants of the Analytical Political Economy Workshop at UMass Amherst for very helpful comments on earlier drafts of this paper. I am also grateful to the editors and two anonymous referees for their valuable comments, as well as David Spielman of the International Food Policy Research Institute for graciously answering questions about the dataset. All remaining errors are my own. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. Byline: Amal Ahmad [amal.ahmad@uni-goettingen.de] (a,b)

Keywords Economic history; Institutions; Culture; Religion; Persistence Abstract This paper provides an introduction to the special issue on culture, institutions, and religion in economic history. It surveys each paper and situates them in the broader literature. Author Affiliation: Economic Department, George Mason University, United States * Corresponding author. Article History: Received 9 July 2022; Accepted 13 July 2022 (footnote)1 I thank Nuno Palma and Jared Rubin for comments. I am grateful to Dan Houser and Daniella Puzzello for the opportunity to edit this special issue and for assisting me through the process. Byline: Mark Koyama [usemkoyama2@gmu.edu] (1,*)

Keywords Pandemic risk; Nursing home; Long-term care; Savings; Public policy Abstract COVID-19 outbreaks at nursing homes during the recent pandemic have received ample media coverage and may have lasting negative impacts on individuals' perception of nursing homes. We argue that this could have sizable and persistent implications for savings and long-term care policies. Our theoretical model predicts that higher nursing home aversion should induce higher savings and stronger support for policies subsidizing home care. Based on a survey of Canadians aged 50 to 69, we document that higher nursing home aversion is widespread: 72% of respondents are less inclined to enter a nursing home because of the pandemic. Consistent with our model, we find that these respondents are more likely to have higher intended savings for old age because of the pandemic. We also find that they are more likely to strongly support home care subsidies. Author Affiliation: (a) Retirement and Savings Institute, HEC Montréal, Montréal, Canada (b) Toulouse School of Economics, CNRS, University of Toulouse Capitole, Toulouse, France (c) Department of Finance and Retirement and Savings Institute, HEC Montréal, Montréal, Canada (d) Department of Economics, Carleton University, Ottawa, Canada (e) Département des Sciences Economiques, ESG-UQAM, Montréal, Canada (f) CESifo, Munich, Germany (g) CORE, Université catholique de Louvain, Louvain-la-Neuve, Belgium * Corresponding author. Article History: Received 10 September 2021; Revised 6 May 2022; Accepted 26 June 2022 (footnote)[white star] This paper draws on research supported by the Social Sciences and Humanities Research Council (Grant 435-2020-0787) and by Fonds de Recherche du Québec-Société et Culture (Grant 2019-SE2-252890). De Donder acknowledges funding from ANR under grant ANR-17-EURE-0010 (Investissements d'Avenir program) and from the Chair 'Marché des risques et création de valeurs, fondation du risque/Scor'. We are grateful to David Boisclair and Julien Navaux for help with the survey, and to Peter van Bergeijk and Raun van Ooijen for helpful discussions of the paper. The usual disclaimer applies. Declarations of interest: none. Byline: Bertrand Achou [bertrand.achou@hec.ca] (*,a), Philippe De Donder [philippe.dedonder@tse-fr.eu] (b), Franca Glenzer [franca.glenzer@hec.ca] (c), Minjoon Lee [minjoon.lee@carleton.ca] (d), Marie-Louise Leroux [leroux.marie-louise@uqam.ca] (e,f,g)

Keywords Preferences; Behavioural economics; Cultural revolution Abstract In this paper we investigate the degree to which a major political upheaval can, through personal experience and intergenerational transmission, change behavioural norms. We focus on the 1966--1976 Cultural Revolution (CR), which seriously disrupted many aspects of Chinese society. In particular, we explore how individuals' behavioural preferences are affected by within-group traumatic events experienced by their parents or grandparents. Using data from a laboratory experiment in conjunction with survey data, we find that individuals with parents or grandparents affected more severely by the CR are less trusting, less trustworthy, and less likely to choose to compete relative to their counterparts whose parents were not mistreated or mistreated at a lesser degree. Author Affiliation: (a) Australian National University, Australia (b) National Taiwan University, Taiwan (c) Peking University, China * Corresponding author. Article History: Received 11 August 2021; Revised 18 May 2022; Accepted 25 June 2022 (footnote)[white star] Booth and Meng designed the project and wrote the paper, while Fan and Zhang contributed to the running of the laboratory experiments. We would like to thank James Jilu Zhang for excellent research assistance. Thanks also go to Bob Gregory and Sen Xue for their constructive suggestions. We also thank participants of the seminars at the Australian National University and Deakin University, and of the conferences at Renmin University and Jinan University for their feedback. Funding from the Australian Research Council, and the College of Business and Economics at ANU is gratefully acknowledged. Ethics approval for the experiment was obtained from the Ethics Committee of the Australian National University. Byline: Alison Booth [alison.booth@anu.edu.au] (a), Xin Meng [xin.meng@anu.edu.au] (a,*), Elliott Fan [elliottfan@ntu.edu.tw] (b), Dandan Zhang [ddzhang@nsd.pku.edu.cn] (c)

Keywords Corporate venture capital; Ambidexterity; Exploration; Exploitation; Performance; Static; Dynamic Highlights * CVC firms develop additional expertise in pursuing both exploitation and exploration activities. * Dynamic sequential ambidexterity increases firm performance. * Simultaneous ambidexterity in CVC investing increases firm performance in times of crisis. * The frequency of changing both exploitative and explorative activities increases firm performance. * The interaction between balanced and simultaneous ambidexterity reinforces firm performance. Abstract The purpose of this paper is to study the evolution of corporate investors' exploitation-exploration allocations and their long-term performance outcomes. The sample consists of 243 North American firms pursuing corporate venture capital (CVC) investments from 1993 to 2017. The results show that dynamic sequential ambidexterity promotes higher firm performance than balanced or simultaneous forms of ambidexterity. Alternating pursuit of exploitation and exploration characterized by a regular frequency of change over time enhances corporate investors' financial performance. The results suggest that CVC firms develop additional expertise in pursuing both exploitation and exploration activities over time which helps to enhance their performance. The findings also show that in times of crisis, the combined use of both exploration and exploitation in CVC investments enables firms to enhance their financial performance. The results are robust to alternative measures of financial performance and to endogeneity concerns. This paper provides insights to policymakers and managers of firms that are investing in CVC activities. Author Affiliation: (a) Léonard de Vinci, Pôle Universitaire, Research Center, 92916 Paris La Défense, France (b) Univ Paris Est Créteil, IRG, 94010 Créteil, France (c) OCRE, EDC Paris Business School, France (d) Université Paris-Saclay, Univ Evry, IMT-BS, LITEM, Evry-Courcouronnes 91025, France * Corresponding author at: Léonard de Vinci, Pôle Universitaire, Research Center, 92916 Paris La Défense, France. Article History: Received 2 July 2021; Revised 26 April 2022; Accepted 12 July 2022 Byline: Fatima Shuwaikh [fatima.shuwaikh@devinci.fr] (a,b,*), Souad Brinette [souad.brinette@edcparis.edu] (c), Sabrina Khemiri [sabrina.khemiri@imt-bs.eu] (d)

Keywords COVID-19; Racial animus; Xenophobia; Social media; Hate crime Abstract This paper studies the formation and the spread of crisis-driven racial animus during the coronavirus pandemic. Exploiting plausibly exogenous variation in the timing of the first COVID-19 diagnosis across US areas, we find that the first local case leads to an immediate increase in local anti-Asian animus, as measured by Google searches and Twitter posts that include a commonly used derogatory racial epithet. This rise in animus specifically targets Asians and mainly comes from users who use the epithet for the first time. These first-time ch-word users are more likely to have expressed animosity against non-Asian minorities in the past, and their interaction with other anti-Asian individuals predicts the timing of their first ch-word tweets. Moreover, online animosity and offline hate incidents against Asians both increase with the salience of the connection between China and COVID-19; while the increase in racial animus is not associated with the local economic impact of the pandemic. Finally, the pandemic-driven racial animus we documented may persist beyond the duration of the pandemic, as most racist tweets do not explicitly mention the virus. Author Affiliation: (a) Alberta School of Business, University of Alberta, 11211 Saskatchewan Dr NW, Edmonton, AB T6G 2R6, Canada (b) Economics Department, University of California San Diego, 9500 Gilman Dr, La Jolla, CA 92093, United States * Corresponding author. Article History: Received 6 March 2021; Revised 26 April 2022; Accepted 20 May 2022 (footnote)[white star] An earlier version of this paper circulated under the title 'From Fear to Hate: How A Pandemic Sparks Racial Animus in the United States.' We are grateful for the support and guidance from Eli Berman, Julie Cullen, and Gordon Dahl. We would also like to thank David Arnold, Julian Betts, Georgy Egorov, Itzik Fadlon, Ruixue Jia, William Mullins, Jacob Shapiro, Jesse Shapiro, and the participants at the UCSD applied lunch seminar, AEA, and SOLE for their constructive feedback. Byline: Runjing Lu [runjing1@ualberta.ca] (*,a), Sophie Yanying Sheng [yas107@ucsd.edu] (b)

Keywords Income; Living standards; Inequality; Childhood shocks; Culture Highlights * This paper explores the association between income and stated views on minimum living standards. * Data from a large nationally representative survey reveal the rich deem fewer items to be essential. * At baseline, the bottom of the income distribution reports 10% more items as essential than the top. * Area-level inequality amplifies the negative income gradient; rich are equally uncaring for kids. * Views are stable, formed primarily in childhood, and have strong effects on views during adulthood. Abstract This paper explores the association between income and stated views on minimum living standards; that is, views on items and activities that no one in today's society should have to go without. Using data from a large nationally representative survey, we find the rich deem fewer items to be essential. In our baseline model, people at the bottom of the income distribution report 10% more items as essential than do people at the top of the income distribution. The negative relationship between income and recommended minimum living standards is robust to conditioning on a large covariate set, and remains evident when we use alternative measures of economic status, such as wealth and neighborhood advantage. We find that area-level income inequality amplifies the negative income gradient, and that the rich are no more considerate towards children than they are towards adults. We also find that changes in people's views across time are relatively small, and unrelated to major economic life events. An explanation for this stability is that views are formed primarily in childhood. We find that economic status in childhood has strong effects on views during adulthood, but that intergenerational economic mobility is unimportant. Author Affiliation: (a) Center for Health Economics, Monash Business School, Monash University, 900 Dandenong Road, Victoria 3145, Australia (b) Department of Economics, Brandeis University, Waltham, MA 02453, USA * Corresponding authors. Article History: Received 19 January 2022; Revised 29 April 2022; Accepted 13 May 2022 Byline: David W. Johnston [David.Johnston@monash.edu] (a,*), Nidhiya Menon [nmenon@brandeis.edu] (b,*)

Keywords Machine learning; Program evaluation; Loan guarantees Abstract Public credit guarantees should be provided to firms that are both creditworthy and credit constrained. We use Machine Learning (ML) predictive tools to propose a targeting rule that includes both objectives. The study elaborates on the case of Italy's Guarantee Fund and demonstrates, by means of ex-post evaluation methods, that the program effectiveness can be increased by ML targeting. We discuss some of the problems in using algorithms for the implementation of public policies, such as transparency and manipulation. Author Affiliation: (a) Bank of Italy, Structural Economic Analysis Directorate, Via Nazionale 91, Roma 00184, Italy (b) Bocconi University and IGIER, Via Roentgen 1, Milano 20136, Italy (c) Sapienza University of Rome, Department of Mathematics, Piazzale Aldo Moro 5, Roma 00185, Italy * Corresponding author. Article History: Received 13 July 2020; Revised 25 February 2022; Accepted 5 April 2022 (footnote)[white star] This paper was partly written while Michela Boldrini and Andrea Paladini were interns at the Structural Economic Analysis Directorate of the Bank of Italy, and while Alessio D'Ignazio was visiting the Quantitative and Applied Spatial Economic Research Laboratory (QASER) at University College London. Preliminary versions of the paper circulated as a Bank of Italy's working paper and as a chapter of Michela Boldrini's PhD thesis at the University of Bologna. For useful comments and suggestions, we would like to thank Carlo Altomonte, Federico Cingano, Giuseppe Grande, Francesca Medda, Fabio Parlapiano, Marco Percoco, Paolo Sestito, Enrico Sette, Luigi Federico Signorini, Andrea Tamoni and the participants at the Bank of Italy workshop Financial factors in the context of economic recovery (Rome, March 2018), the University of Bologna PhD Forum (Bologna, March 2018), the Bank of Italy workshop on 'Big Data & Machine Learning' (Rome, June 2018), the XXX Annual Conference of the Italian Society of Public Economics (Padua, September 2018), the conference on Counterfactual Methods for Policy Impact Evaluation 2018 (Berlin, September 2018), the international conference on 'Entrepreneurship and Economic Development: Assessing the Effectiveness of Public Policies' (Bari, October 2018), the seminar series of the Center for Studies in Economics and Finance (Naples, November 2018), the seminar series of the Joint Research Center of the European Central Bank (Ispra, November 2018), the Bank of England workshop 'Modeling with Big Data and Machine Learning' (London, November 2018), the meeting of the European Network for Research on Investment (Luxembourg, November 2018), the 29th (EC)^2 Conference 'Big Data Econometrics with Applications' (Rome, December 2018), the conference on New Analytical Tools and Techniques for Economic Policymaking (Paris, April 2019), the EU Conference on Modeling for Policy Support (Brussels, November 2019), and the seminar Counterfactual evaluations and machine learning for program targeting (Luxembourg, December 2019). The views expressed in this paper are those of the authors and do not necessarily correspond to those of the institutions they are affiliated with. Byline: Monica Andini (a), Michela Boldrini (b), Emanuele Ciani (a), Guido de Blasio (a), Alessio D'Ignazio [alessio.dignazio@bancaditalia.it] (a,*), Andrea Paladini (c)

Keywords Competitiveness; Gender; Experiments; Meta-analysis Abstract This paper systematizes the experimental evidence on gender differences in competition preferences with a meta-analysis of 110 studies and 409 effect sizes on observed or residual gender gaps in experimental tournament entry. Our meta-summary confirms that, across all studies, men choose a tournament scheme 13 percentage points more often than women, which is only about a third of the gap found in Niederle and Vesterlund's (2007) seminal paper. Our meta-regression analysis reveals that larger gender differences are indeed prevalent in studies that most closely apply the Niederle-Vesterlund design, i.e., differences are largest in lab experiments with student subject pools and when math tasks are involved, but almost negligible for other age groups, verbal tasks, and in field-like environments. Experimental interventions such as information treatments or affirmative action measures prove very effective in reducing or even eliminating the gender gap. Although some measures of risk preferences and confidence are systematically related to the estimated residual gender gap in tournament entry, they do not eradicate competitiveness as a distinct trait. Finally, higher gender equality at the country level seems to go along with larger differences in women's and men's competition preferences. Author Affiliation: (a) Universität Hamburg, Department of Socioeconomics, Welckerstr. 8, Hamburg 20354, Germany * Corresponding author. Article History: Received 30 November 2020; Revised 2 March 2022; Accepted 29 March 2022 Byline: Eva Markowsky [eva.markowsky@uni-hamburg.de] (a,*), Miriam Beblo (a)

Keywords Online experiment; Myopic loss aversion; Debiasing; Experience sampling Abstract We introduce a training intervention based on a novel tool to mitigate behavior consistent with myopic loss aversion (MLA). We present the results of a large-scale online experiment with 894 student participants. The study featured a two-step debiasing training intervention based on experience sampling and a subsequent elicitation of MLA. We found that participants in the baseline treatment exhibit behavior consistent with MLA, which was not the case for decision makers who underwent the debiasing training intervention. Nonetheless, we found no statistically significant difference-in-difference effect of the training intervention on the magnitude of MLA. However, when we focused on the more attentive participants, the magnitude of the difference-in-difference effect of the training intervention increased strongly and became statistically significant when controlling for age, gender, education, field of study, investment experience, and risk preferences. Author Affiliation: University of Innsbruck, Department of Banking and Finance, Universitätsstrasse 15, Innsbruck 6020, Austria * Corresponding author. Article History: Received 27 April 2021; Revised 18 January 2022; Accepted 27 March 2022 (footnote)[white star] We thank two anonymous referees, the associate editor, participants at the 96th Annual WEAI Conference 2021, Felix Holzmeister, Christoph Huber, Jürgen Huber, Michael Kirchler, Christian König, Michael Razen and Matthias Stefan for very valuable comments on previous versions of the paper. The financial support of the Network Banking, Accounting, Auditing, Finance & IT (BAFIT), the Research Platform Empirical and Experimental Economics (eeecon), the University of Innsbruck, and the Austrian Science Fund is gratefully acknowledged. The registered pre-analysis plan, the experimental data, and a demo version of the software are available on OSF. There are no conflicts of interest for any of the authors of this paper. Byline: Laura Hueber [laura.hueber@uibk.ac.at], Rene Schwaiger [rene.schwaiger@uibk.ac.at] (*)

Keywords Brief Self-Control Scale; personality traits; intergenerational transmission Abstract This study investigates the predictive power of self-control for individuals and their children using population representative data. We use the well-established Brief Self-Control Scale to demonstrate that people's trait self-control is highly predictive of their life outcomes. Higher self-control is associated with better health, education, and employment outcomes as well as greater financial and overall well-being. Importantly, self-control often adds explanatory power in addition to more frequently studied personality traits and economic preferences. The self-control of children is correlated with that of their parents, while higher parental self-control is also linked to fewer behavioral problems among children. Our results suggest that social interventions targeting self-control may be beneficial. Author Affiliation: (a) The University of Sydney, School of Economics (b) The University of Melbourne, Melbourne Institute: Applied Economic & Social Research (c) Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (d) ARC Centre of Excellence for Children and Families over the Life Course (e) IZA Institute of Labor Economics * Corresponding author at Düsseldorf Institute for Competition Economics, Oeconomicum Building, Universitätsstr. 1, Heinrich Heine University Düsseldorf, 40225 Düsseldorf, Germany. Tel.: +49 211 81-10598. Article History: Received 18 June 2021; Revised 16 February 2022; Accepted 28 February 2022 (footnote)[white star] We thank the Editor, Daniela Puzzello, an Associate Editor, and two anonymous referees for many helpful suggestions which improved the paper considerably. We are grateful to the German Institute for Economic Research (DIW Berlin) for enabling us to introduce the Brief Self-Control Scale into the Innovation Sample of the Socio-Economic Panel. We especially thank David Richter for help with the implementation. For useful comments, we thank Lorenz Götte, Paul Heidhues, Christian Michel, Muriel Niederle, and Matthias Pelster, as well as participants of the 2019 EEA conference in Manchester, the 2019 IAREP--SABE conference in Dublin, the 2019 NCBEE in Kiel, and the 2019 German Economic Association conference in Leipzig and seminar participants at DIW Berlin, Sydney, Düsseldorf, Paderborn, and Lüneburg. This article is a shorter and substantially revised version of the original working paper 'Self-Control: Determinants, Life Outcomes and Intergenerational Implications' (IZA Discussion Paper 12488, July 2019). The authors are grateful for research support from the Australian Research Council (CE140100027, CE200100025, DP200100979). This paper uses data from the German Socio-Economic Panel Innovation Sample (doi:10.5684/soep.is.2018). Instructions for accessing the data can be found here: https://www.diw.de/documents/dokumentenarchiv/17/diw_01.c.44985.de/soep_cnef_access_procedures_2014.pdf. The authors make syntax files that allow replicating all results available upon request. The views expressed herein are solely those of the authors. Byline: Deborah A. Cobb-Clark (a,d,e), Sarah C. Dahmann (b,d,e), Daniel A. Kamhöfer [kamhoefer@dice.hhu.de] (*,c,e), Hannah Schildberg-Hörisch (c,d,e)

Keywords Human-wildlife conflicts; Animal behavior; Land use; Nash equilibrium Abstract While there is an increased focus on promoting eco-friendly cities, biologically important but dangerous wildlife creatures encroach into cities, which can cause human-wildlife conflicts. We examine how the encroachment of wildlife affects humans' decisions to exterminate wildlife, the spatial patterns of conflicts, and the size of cities. We develop a theoretical model where animals optimize their food intake by spreading out in response to heterogeneous feeding grounds in cities, and humans choose their housing location and exterminate wildlife in response to the presence of wildlife. We characterize a Nash equilibrium of land competition in every location and then prove the existence and uniqueness of the spatial equilibrium. We solve the optimal and the equilibrium and obtain properties with respect to human population density, the densities of wildlife species, the level of countermeasures against wildlife, and human-wildlife conflicts at each location; the numbers of species; and the size of cities. Author Affiliation: (a) Kyushu University, Fukuoka, Japan (b) Tohoku University, Sendai, Japan * Corresponding author. Article History: Received 9 July 2020; Revised 8 December 2021; Accepted 18 March 2022 (footnote)â° We would like to thank Kenichi Akao, Akira Hibiki, Takatoshi Tabuchi, Andre Fernandes Tomon Avelino, Toshimori Otazawa, and the participants at several conferences for valuable comments on an earlier draft of this paper. The importance of the distance between humans and dangerous species (e.g., carnivores), which is an important factor of our paper, was discussed in the doctoral thesis examination process of Masahiro Abe (review committee composed of Jiro Akita, Kentaro Nakajima and Tatsuhito Kono) in the sense that such dangerous species have some values for humans. We thank Jiro Akita for starting this discussion and giving the inspiration for our study. However, the discussion there referred to neither urban economic models nor ecosystem models. This research was supported by the Ministry of Education, Culture, Sports, Science and Technology (Grant-in-Aid for JSPS Fellows 21K18128) and the Environment Research and Technology Development Fund (JPMEERF20S11821) of the Environmental Restoration and Conservation Agency of Japan, which are gratefully acknowledged. Byline: Jun Yoshida (a), Tatsuhito Kono [kono@tohoku.ac.jp] (b,*)

Keywords Japanese economy; Secondary employment; Deflation; Dual labor market; Phillips curve Highlights * We present a hybrid macro-agent-based model estimated on Japanese data. * We study the effects of secondary employment on inflation and output. * Demand uncertainty impacts on inflation and Phillips curve. * Minimum-wage indexation and workers bargaining power determine inflation. * Quantitative easing can lower inflation by increasing secondary employment. Abstract The paper presents a stock-flow-consistent hybrid macro-agent-based model estimated on Japanese data to study the interdependency among the dual labor market, output, and wage dynamics. By modeling the use of secondary workers as a financial buffer for non-financial firms, the paper investigates the possible impact of uncertainty and financial fragility on inflation and the weakening of the trade off between inflation and unemployment. The paper also contributes to the recent developments in the estimation of agent-based models by presenting an original technique, which relies on the identification and optimization of surrogate models. The numerical results show that the elasticity of firms' hiring choices to volatility in demand is the main behavioral factor affecting both inflation and the Phillips curve, revealing that uncertainty can have consequences also on prices and not only on real variables as already discussed by the literature. Inflation and Phillips curve are also influenced by the bargaining power of workers and by the indexation of minimum wages, while conventional monetary policy and fiscal policy have limited effects. Unconventional monetary policy can have unintended deflationary consequences, by allowing financially distressed firms, which are more likely to resort to secondary workers, to survive. Author Affiliation: (a) Economics Discipline Group, University of Technology Sydney, Australia (b) Centre for Applied Macroeconomic Analysis, Australian National University, Canberra, Australia (c) Center for Computational Social Science, Kobe University, Kobe, Japan (d) Graduate School of Simulation Studies, University of Hyogo, Kobe, Japan * Corresponding author at: University of Technology Sydney - PO Box 123, Broadway, NSW 2007, Australia. Article History: Received 15 June 2021; Revised 26 December 2021; Accepted 5 February 2022 Byline: Corrado Di Guilmi [corrado.diguilmi@uts.edu.au] (*,a,b,c), Yoshi Fujiwara (d)

Keywords Animal Choice; Rationality; Stochastic Choice; Revealed Preference Abstract This paper re-examines research that studies economic rationality using experimental data generated by nonhuman animals (e.g. rats, pigeons, monkeys, etc.). The standard experimental methodology to elicit choices from nonhuman animals allows a researcher to test three types of economic rationality: standard deterministic utility maximization, average choice rationality, and random utility maximization. Most of the research has evaluated whether animals satisfy average choice rationality. We describe the difference between these models and check each type of rationality on capuchin monkey data from Chen et al.(2006). We reject standard deterministic utility maximization and random utility maximization for most subjects, but we cannot reject average choice rationality. This paper is the first to provide a statistical test for average choice rationality. Author Affiliation: (a) Department of Economics, University of Western Ontario, Canada (b) Department of Economics, University of Sussex, United Kingdom (c) Department of Economics, Ohio State University, United States * Corresponding author. Article History: Received 5 April 2021; Revised 13 December 2021; Accepted 6 February 2022 (footnote)[white star] We thank Keith Chen for providing access to the data. We thank Abi Adams-Prassl, Victor Aguiar, Christopher P. Chambers, Laurens Cherchye, Ian Crawford, Bram De Rock, Thomas Demuynck, John Kagel, Matthew Polisson, Gerelt Tserenjigmid, and conference participants at the conference on 'Consumer Behaviour: New Models, New Methods' for helpful comments. Portions of this paper were previously included in the manuscript 'Revealed statistical consumer theory.' Byline: Roy Allen [rallen46@uwo.ca] (a), Pawel Dziewulski [P.K.Dziewulski@sussex.ac.uk] (b), John Rehbeck [rehbeck.7@osu.edu] (*,c)

Keywords Natural Disasters; Financial Hardship; Risk Aversion; Mental Health; Resilience Abstract We estimate the economic impacts of having your home damaged or destroyed by a natural disaster. Regressions with individual, area and time fixed-effects, indicate that experiencing a natural disaster has no impact on employment and income, but substantial impacts on financial hardship and risk aversion. Impacts are particularly large for smaller isolated disasters, which attract little government support. Conversely, impacts of residing in a disaster zone without experiencing residential destruction are small. Using a Group Fixed Effects estimator, we find predictors of financial vulnerability to destruction include age, parenthood, illness, and social support. These results can help improve the allocation of government assistance after future disasters. Author Affiliation: (a) Formerly at the Economics Discipline Group, University of Technology Sydney, Australia (b) Centre for Health Economics, Monash University, Melbourne, Australia (d) Economics Discipline Group, University of Technology Sydney, Australia * Corresponding author. Article History: Received 27 May 2021; Revised 23 December 2021; Accepted 25 January 2022 (footnote) This paper is written in remembrance of our co-author and friend, Meliyanni Johar, who sadly passed away in January 2019. We are grateful to the Australian Research Council (ARC) for helping to fund this research (DP170100177). This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute. Byline: Meliyanni Johar (a), David W. Johnston (b), Michael A. Shields [michael.shields@monash.edu] (b,*), Peter Siminski (d), Olena Stavrunova (d)

Keywords Cash transfer programs; Child labor; Schooling; Idleness Highlights * This paper uses a randomized control trial that evaluates a cash transfer (CT) program in Ecuador. * The CT reduces the probability that a household would choose child labor and increases the likelihood of combining child labor with schooling. * The effects of the program are heterogeneous for boys and girls. * The impact of the CT on a child's time allocation is mainly explained by its effect at the extensive margin rather than at the intensive margin. * The paper develops a stylized model that qualitatively explains the results, unravels potential mechanisms, and shows how different transfer designs affect welfare. Abstract This paper investigates the impact of a government cash transfer on household decisions regarding different activities that a child may perform (schooling, work, leisure). Using data from a randomized evaluation of a cash transfer program in Ecuador, I estimate a choice model to quantify the effect of this policy. The empirical results suggest that the most common behavioral change caused by the program was a reduction in the probability that the household would send the child to work and an increase in the likelihood that a household would choose to combine child labor with schooling. On the other hand, the transfer reduced the allocation of time to certain child working activities, but these results are mainly driven by the effect of the transfer at the extensive margin rather than at the intensive margin. To explain these findings and provide recommendations on how to improve the design of cash transfers, I develop a theoretical model of parental decision-making regarding child activities. Depending on the endowment of skills, a cash transfer attenuates the likelihood of parents choosing market work for their child and increases the likelihood that they may send the child to school or combine child labor with schooling. By modeling the cash transfer as a subsidy of the human capital input and as lump-sum transfer, this study also contributes to the rising evidence that the design of welfare programs strongly matters in terms of achieving program goals. Author Affiliation: Economics Research Division, The Bank of Mexico, 18 Av. 5 de Mayo. Colonia Centro, CDMX, México 06000, México Article History: Received 11 June 2021; Revised 21 December 2021; Accepted 15 February 2022 (footnote)[white star] The views and conclusions presented in this paper are exclusively of the author and do not necessarily reflect those of Banco de México or its Board of Governors. (footnote)1 I am grateful for constructive feedback and comments from Paul Glewwe, Joseph Ritter, Aaron Sojourner, Rob Garlick and Laura Kalambokidis. I am also thankful to two anonymous referees and the editor whose recommendations have improved this paper as well as the participants in the Bank of Mexico Seminar and the University of Minnesota Economic Development Seminar. Byline: José L. Casco [jose.casco@banxico.org.mx] (1)

Keywords Corporate taxation; Tax avoidance; Profit shifting; Multinational enterprises; country-by-country reporting Abstract This paper is the first to use information from individual country-by-country (CbC) reports to assess the extent of profit shifting by multinational enterprises. Unlike other data often used to evaluate the extent of profit shifting and tax avoidance, CbC reports provide a complete coverage of the global distribution of profits and indicators of economic activity for multinationals exceeding a certain revenue threshold. We show that 82% of the German multinationals subject to CbC reporting have tax haven subsidiaries and that these subsidiaries are notably more profitable than those in non-havens. However, only 9% of the global profits of German multinationals are reported in tax havens. Results from regression analysis suggest that approximately 40% of the profits reported in tax havens are a result of tax-induced profit shifting. The associated annual tax base loss for Germany amounts to EUR 5.4 billion, corresponding to 4.3% of the profits reported by these firms in Germany. This implies a tax revenue loss of EUR 1.6 billion per year. Author Affiliation: (a) ifo Institute Munich, Germany (b) University of Munich, Germany (c) CESifo Munich, Germany * Corresponding author at: ifo Institute Munich, Germany. Article History: Received 24 May 2021; Revised 29 October 2021; Accepted 9 November 2021 (footnote)[white star] This research includes work undertaken on behalf of and financed by the German Federal Ministry of Finance. However, this work should not be construed to represent the Ministry's position or that of any of its staff members. The work was done independently by the authors and on their own responsibility. The views expressed in this paper are thus those of the authors. We thank Michelle Hanlon, James Hines, Rebecca Lester, Andreas Peichl, Dominik Sachs, Juan Carlos Suárez Serrato, participants of the NBER workshop on 'Business Taxation in a Federal System' and a workshop organized by the Center for Economic Studies in Munich for helpful comments on earlier versions of this paper. The usual disclaimer applies. Byline: Clemens Fuest (a,b,c), Felix Hugger (b), Florian Neumeier [Neumeier@ifo.de] (*,a,b,c)

Keywords Position effect; Order effect; Choice fatigue; Prominence; Lists Highlights * Try to better understand why individuals tend to select items at the top of lists. * Randomize the order in which new research papers are presented in email alerts. * Measure how list positions affect users' download activity using disaggregate data. * Among other results, show how position effects relate to users' selection orders. * Most consistent with choice fatigue under a downwards-then-upwards selection order. Abstract This paper aims to better understand why individuals tend to select items at the top of lists. Within a natural field experiment, we randomize the order in which new economics research papers are presented in email alerts and measure the subsequent download activity. Our novel disaggregate data allows us to evidence i) how position effects vary across users, ii) the order in which users select their items, and iii) how position effects are related to users' selection orders. Overall, the findings are most consistent with an explanation of choice fatigue where users consider the listed items in a downwards-then-upwards order. Author Affiliation: (a) Faculty of Business and Law, Curtin University, Perth, Australia (b) Center for Cognitive Economics, Università del Piemonte Orientale, Italy (c) School of Business and Economics, Loughborough University, UK * Corresponding author. Article History: Received 5 April 2020; Revised 24 November 2021; Accepted 4 December 2021 (footnote)[white star] This paper is a substantially revised version of an earlier, now defunct, draft that only used aggregate data by Novarese and Wilson, entitled 'Being in the Right Place: A Natural Field Experiment on List Position and Consumer Choice'. Novarese is the director and general editor of New Economics Papers (NEP). This work was supported by the Australian Research Council and the Università del Piemonte Orientale. Declarations of interest: none. We thank the editor and two referees for their insightful comments. We also thank the seminar participants and discussants at the Economic Science Association, the Internet Search and Innovation Conference at Northwestern, the Search and Switching Costs Workshop at Groningen, IIOS, EARIE, JEI, and UEA. Finally, thanks to RePEc, NEP, and the participating editors, as well as Chris Jagau and Cesare Tibaldeschi for their assistance. Byline: Mark N. Harris [mark.harris@curtin.edu.au] (a), Marco Novarese [marco.novarese@jp.unipmn.it] (b), Chris M. Wilson [c.m.wilson@lboro.ac.uk] (*,c)

Keywords Game form recognition; Game form misconception; Becker-DeGroot-Marschak mechanism; First price auction; Preference elicitation; Cognitive load; Cognitive resources; Raven test; Fluid intelligence Abstract This study further examines the failure of game form recognition in preference elicitation (Cason and Plott, 2014) by making elicitation more cognitively demanding through a cognitive load manipulation. We hypothesized that if subjects misperceive one game for another game, then by depleting their cognitive resources, subjects would misconceive the more-cognitively demanding task for the less-cognitively demanding task at a higher rate. We find no evidence that subjects suffer from a first-price-auction game-form misconception, but once cognitive resources are depleted, subjects' choices are better explained by random choice. More cognitively able subjects are more immune to deviations from sub-optimal play than lower cognitively able subjects. Moreover, we find no support for partial game form recognition. Our results are robust to the integration of risk preferences in the analysis. Author Affiliation: (a) Department of Agricultural Economics & Rural Development, School of Applied Economics and Social Sciences, Agricultural University of Athens, Iera Odos 75 11855, Greece (b) Department of Agricultural Economics, Texas A&M University, College Station TX 77843, USA * Corresponding author. Article History: Received 18 September 2020; Revised 30 September 2021; Accepted 2 November 2021 (footnote)[white star] We would like to thank the editor, an anonymous reviewer, Tim Cason and Achilleas Vassilopoulos for thoughtful comments and suggestions; Effrosyni Papadopoulou for excellent research assistance. The experiment described in the paper has been funded by Nayga's Tyson Endowed Chair while at the University of Arkansas. Data and codes to replicate the analysis and results reported in the paper have been deposited at the Open Science Framework: https://osf.io/4zw72/. Byline: Andreas C. Drichoutis [adrihout@aua.gr] (*,a), Rodolfo M. Nayga Jr. [rudy.nayga@ag.tamu.edu] (b)

Keywords Preference representation; Incentives; Electoral systems; Voting; Responsiveness; Legislative behavior; Electoral connection Abstract The role of electoral incentives vs. selection is ideally analyzed in a setting where individual legislators are selected to decide on policies under different electoral rules and where voter preferences on policies can be precisely measured. This is the first paper to look at such a situation. The institutional setting of Switzerland allows us to observe the behavior of legislators who change from a proportionally-elected chamber to a majority-elected chamber of parliament with their electorate being the same in both chambers. Voter preferences are revealed in referenda. We identify behavioral changes of legislators who are chamber-changers in comparison to other legislators due to the respective electoral rules along three dimensions, all measured at the level of individual legislators: representation of revealed voter preferences for policies, party loyalty, and interest group affiliations. The evidence suggests that electoral incentives explain the behavioral response of chamber-changers towards voter preferences to such an extent that there remains no relevant role for selection. After having changed from a proportionally-elected chamber to a majority-elected chamber, chamber-changers cater more intensely for the preferences of the voter majority (including the median voter), become less loyal towards their party and adapt their lobby group affiliations towards more district-oriented interests. Author Affiliation: (a) University of Bayreuth, Bayreuth, Germany (b) CREMA -- Center for Research in Economics, Management, and the Arts, Zurich, Switzerland (c) University of Fribourg, Fribourg, Switzerland (d) IWP Institute for Swiss Economic Policy at the University of Lucerne, Lucerne, Switzerland * Corresponding author at: University of Bayreuth, Department of Economics, Universitätsstraße 30, 95440 Bayreuth, Germany. Article History: Received 16 March 2021; Revised 30 August 2021; Accepted 22 October 2021 (footnote) Earlier versions of this paper were presented at the 3rd Workshop on Political Economy, Indiana University, University of Munich, Max-Planck-Institute, and the Ostrom Workshop. Byline: Marco Portmann (b,d), David Stadelmann [david.stadelmann@uni-bayreuth.de] (a,b,*), Reiner Eichenberger (b,c)

Keywords Wildfires; Georeferencing; Life satisfaction Abstract This paper estimates the wellbeing effects of the 2009 Black Saturday Bushfires, the deadliest wildfire event in Australia's known history. Using subjective wellbeing data from a nationally representative longitudinal study and adopting an individual fixed-effects approach, our results identify a significant reduction in life satisfaction for individuals residing in close proximity of the wildfires. The negative wellbeing effect is valued at A$52,300. This corresponds to 80% of the average annual income of a full-time employed adult in the state of Victoria. The satisfaction domain most negatively affected is how safe the person feels, and the group most affected are people with low social support. A delayed adverse mental health effect is also identified. Author Affiliation: (a) Monash University, Centre for Health Economics, Building 75, Clayton, VIC 3800, Australia (b) Ghent University, Department of Economics, Sint-Pietersplein 5, Ghent 9000, Belgium (c) Curtin University, School of Accounting, Economics and Finance, Perth, WA 6102, Australia (d) Deakin University, Department of Economics, 70 Elgar Road, Burwood, VIC 3125, Australia * Corresponding author. Article History: Received 31 December 2020; Revised 10 October 2021; Accepted 24 October 2021 (footnote)[white star] We would like to thank the journal's Co-Editor-in-Chief Professor Daniela Puzzello, an Associate Editor, and three anonymous referees for reviewing and providing constructive insights into this paper. Mehmet Ulubasoglu gratefully acknowledges the financial support from the Bushfire and Natural Hazards Cooperative Research Centre, the Commonwealth Government of Australia, for the project titled Optimising Post-Disaster Recovery Interventions in Australia. David Johnston acknowledges financial support from the Australian Research Council (ARC Discovery Project grant DP170100177). This paper uses unit record data from Release 18 of the Household, Income and Labour Dynamics in Australia (HILDA) Survey, Waves 2-11 (2002-2011). The HILDA Survey Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to the DSS or the Melbourne Institute. All errors are our own. Byline: David W. Johnston [David.Johnston@monash.edu] (a), Yasin Kürsat Önder [kursat.onder@ugent.be] (b), Muhammad Habibur Rahman [habib.rahman@curtin.edu.au] (c), Mehmet A. Ulubasoglu [mehmet.ulubasoglu@deakin.edu.au] (d,*)

Keywords Inequality; Redistribution; Social mobility; Political economy Abstract We examine whether variation in preferences for redistribution between the United States and Western Europe can be explained by inaccurate beliefs about the extent to which differences in people's wealth are due to factors outside of their control. To do this, we conduct a randomized survey experiment with over 8000 respondents in the United States, the United Kingdom, Spain, the Netherlands and Denmark, half of which receive accurate information about both wealth inequality and intergenerational mobility in their country. This information increased support for economic redistribution in Western Europe, but had the opposite effect in the United States. The negative treatment effect was primarily driven by Americans who held a prior belief that high levels of inequality do not exist. Our findings illustrate substantial differences in the elasticity of people's support for economic redistribution across the Atlantic and that efforts to correct inaccurate beliefs about inequality and mobility can backfire. Author Affiliation: (a) Australian National University, J.G. Crawford Building, Lennox Crossing, Canberra, ACT 2601, Australia (b) Oxfam Great Britain, Oxford House Parkway Court, John Smith Drive, Oxford Business Park SouthOxford Oxfordshire OX4 2JY * Corresponding author. Article History: Received 21 October 2020; Revised 17 October 2021; Accepted 22 October 2021 (footnote)[white star] This paper is based on the findings of a series of cross-country randomized survey experiments that were registered with the American Economic Association RCT registry (ID number AEARCTR-0002534). The authors are very grateful for comments provided by Rema Hanna, Nathan Hendren, Julian Jager, Russell Toth, Ben Goldsmith, Deborah Hardoon, David Hope, Alice Krozer, David McArthur, Ekaterina Zhuravskaya and seminar participants at the London School of Economics, University College London and the Australian National University. This paper presents independent analysis and was funded by Oxfam International. The content of the paper is solely the responsibility of the authors and does not necessarily reflect the official views of the funder. Byline: Christopher Hoy [christopher.hoy@anu.edu.au] (*,a), Franziska Mager (b)

Keywords Information rigidity; Disaggregated prices; Market structure Highlights * Sectoral inflation persistence is negatively correlated with market concentration. * A model with monopolistic competition under quadratic utility is introduced. * The model explains the empirical pattern if it allows imperfect common knowledge. * Both structures of market and information matter for inflation persistence. Abstract Previous studies have stressed that inflation dynamics exhibit substantial dispersion across sectors. Using US producer price data, we present evidence that sectoral inflation persistence is negatively correlated with market concentration, which is difficult to reconcile with the prediction of the standard model of monopolistic competition. To better explain the data, we incorporate imperfect common knowledge into the monopolistic competition model introduced by Melitz and Ottaviano (2008). In the model, pricing complementarity among firms increases as market concentration decreases. Because higher pricing complementarity generates greater inflation persistence, our model successfully replicates the observed negative correlation between inflation persistence and market concentration across sectors. Author Affiliation: (a) Faculty of Economics, Asia University, Japan (b) Financial System and Bank Examination Department, Bank of Japan, Japan (c) Institute of Social and Economic Research, Osaka University; CAMA, 6-1 Mihogaoka, Ibaraki, Osaka 567-0047, Japan * Corresponding author. Article History: Received 29 November 2020; Revised 21 October 2021; Accepted 22 October 2021 (footnote)[white star] We thank Ryan Chahrour, Jeffrey Fuhrer, Mark Gertler, Yukinobu Kitamura, John McDermott, Benjamin Moll, Satoshi Nakada, Taisuke Nakata, Kiyohiko G. Nishimura, Mototsugu Shintani, Takeki Sunakawa, Yuki Teranishi, Takashi Ui, Rosen Valchev, and Toshiaki Watanabe for their helpful comments and discussions. Kato and Tsuruga gratefully acknowledge the financial support of the Joint Usage/Research Center at the Institute of Social and Economic Research (ISER) and Kyoto Institute of Economic Research (KIER), Grants-in-Aid for Scientific Research (JP18K01684, JP19K23219, JP20H05631, JP20H05633, and JP21H04397). This paper previously circulated as 'Market Concentration and Sectoral Inflation under Imperfect Common Knowledge.' The views expressed in this paper are those of the authors and do not necessarily reflect the official view of the Bank of Japan. Byline: Ryo Kato (a), Tatsushi Okuda (b), Takayuki Tsuruga [tsuruga@iser.osaka-u.ac.jp] (c,*)

Keywords Retirement intentions; Job involvement; Work disability; Population ageing Highlights * We analyze the effect of work disability on the job involvement of older workers. * Job involvement is measured by the intentions to retire from current job. * Work disability measures are based on objective indicators and anchoring vignettes. * Work disability limitations reduce job involvement. * The role of work disability varies with job characteristics. Abstract This paper analyzes the effect of work disability on the job involvement of workers aged 50--65 living in Europe. We elicit a measure of job involvement from a question asking respondents to think about their job and declare whether they would like to retire as early as they can. We exploit objective health indicators and anchoring vignettes to enhance the comparability across individuals of work disability self-assessments. Individuals' evaluations of their health-related work limitations are found to be mildly affected by justification bias but to depend on individual heterogeneity in reporting behaviour. Work disability significantly reduces the job involvement of workers. After controlling for individual fixed-effects and an extensive set of time-varying covariates, moving from the first to the third quartile of the work disability distribution is associated with a 8% increase (4 percentage points) in the probability of desiring to retire as soon as possible. The effect is larger for blue-collar workers. Justification bias and heterogeneity in reporting behaviour do not alter the magnitude of these effects..sup.11We thank the Editor and two anonymous referees for their comments. We are also grateful to Marco Bertoni and the participants at the workshop 'The Labour Market with an Ageing Population' (2018) organized by IFAU and Uppsala University and at the ASSET Annual Meeting (2018) for their suggestions. A previous version of this paper circulated under the title 'The effect of work disability on the intention to retire of older workers'. This paper uses data from SHARE Waves 1 and 2 (DOIs: 10.6103/SHARE.w1.600, 10.6103/SHARE.w2.600), see for methodological details. The SHARE data collection has been primarily funded by the European Commission through FP5 (QLK6-CT-2001-00360), FP6 (SHARE-I3: RII-CT-2006-062193, COMPARE: CIT5-CT-2005-028857, SHARELIFE: CIT4-CT-2006-028812) and FP7 (SHARE-PREP: N[degree]211909, SHARE-LEAP: N[degree]227822, SHARE M4: N[degree]261982). Additional funding from the German Ministry of Education and Research, the Max Planck Society for the Advancement of Science, the U.S. National Institute on Aging (U01_AG09740-13S2, P01_AG005842, P01_AG08291, P30_AG12815, R21_AG025169, Y1-AG-4553-01, IAG_BSR06-11, OGHA_04-064, HHSN271201300071C) and from various national funding sources is gratefully acknowledged (see www.share-project.org). We gratefully acknowledge financial support from the European Commission -- Horizon 2020 (SHARE-COHESION: GA No870628). D. Cavapozzi thanks the VERA center at the Ca Foscari University of Venice for supporting open access publication. Author Affiliation: (a) Department of Economics, Fondamenta San Giobbe, Ca' Foscari University of Venice, Cannaregio 873, Venezia 30121, Italy (b) Department of Economics and Management 'M. Fanno', University of Padova, via del Santo 33, Padova 35123, Italy * Corresponding author. Article History: Received 28 April 2020; Revised 27 September 2021; Accepted 22 October 2021 (footnote)1 We thank the Editor and two anonymous referees for their comments. We are also grateful to Marco Bertoni and the participants at the workshop 'The Labour Market with an Ageing Population' (2018) organized by IFAU and Uppsala University and at the ASSET Annual Meeting (2018) for their suggestions. A previous version of this paper circulated under the title 'The effect of work disability on the intention to retire of older workers'. This paper uses data from SHARE Waves 1 and 2 (DOIs: 10.6103/SHARE.w1.600, 10.6103/SHARE.w2.600), see for methodological details. The SHARE data collection has been primarily funded by the European Commission through FP5 (QLK6-CT-2001-00360), FP6 (SHARE-I3: RII-CT-2006-062193, COMPARE: CIT5-CT-2005-028857, SHARELIFE: CIT4-CT-2006-028812) and FP7 (SHARE-PREP: N[degree]211909, SHARE-LEAP: N[degree]227822, SHARE M4: N[degree]261982). Additional funding from the German Ministry of Education and Research, the Max Planck Society for the Advancement of Science, the U.S. National Institute on Aging (U01_AG09740-13S2, P01_AG005842, P01_AG08291, P30_AG12815, R21_AG025169, Y1-AG-4553-01, IAG_BSR06-11, OGHA_04-064, HHSN271201300071C) and from various national funding sources is gratefully acknowledged (see www.share-project.org). We gratefully acknowledge financial support from the European Commission -- Horizon 2020 (SHARE-COHESION: GA No870628). D. Cavapozzi thanks the VERA center at the Ca Foscari University of Venice for supporting open access publication. Byline: Danilo Cavapozzi [danilo.cavapozzi@unive.it] (a,*), Chiara Dal Bianco (b)

Keywords Intergenerational impacts; Single parents; Welfare reform; Young adults Abstract This paper provides new causal evidence on how a reduction in welfare cash assistance to newly separated parents impacts the parents themselves and their young-adult children. Our paper differs from the rest of the literature evaluating the intergenerational impacts of welfare policy because it focuses on the role of welfare assistance specifically at the point of parental relationship separation. A priori, it is unclear if a policy that provides welfare assistance to newly separated mothers produces work-disincentive effects and/or whether, on balance, it helps or hinders recovery from the event of separation. We use a reform that withdrew welfare eligibility from mothers who separated from their partners on or after 1 July 2006, while mothers who separated before this date were exempt from the new rules. We exploit this discontinuity in a Regression Discontinuity framework using biweekly administrative social security records. We find that the loss of welfare eligibility at the time of relationship breakdown reduces mothers' welfare benefits, but increases their personal and family income. The reform is found to decrease young adults' reliance on unemployment benefits, but this result is weaker and less robust. The effects on young adults' receipt of other types of welfare payments, fertility, homelessness or financial independence cannot be identified precisely. Author Affiliation: (a) City, University of London, United Kingdom (b) Royal Melbourne Institute of Technology (RMIT) University, Melbourne, Australia (c) Institute for the Study of Labor (IZA) (d) ARC Centre of Excellence for Children and Families over the Life Course, Australia * Corresponding author. Article History: Received 5 November 2020; Revised 6 August 2021; Accepted 23 September 2021 (footnote)[white star] This research was supported by the Australian Research Council (ARC) Centre of Excellence for Children and Families over the Life Course (project number CE140100027). The Centre is administered by the Institute for Social Science Research at The University of Queensland, with nodes at The University of Western Australia, The University of Melbourne and The University of Sydney. This paper uses unit record data from the Centrelink administrative records from the Department of Social Services (DSS). The findings and views reported in this paper are those of the authors and should not be attributed to the ARC or DSS. Zhu acknowledges the support of the Australian Research Council Linkage Project (LP170100472). The paper benefited from the helpful comments of attendees at the Australian Conference of Economists, the Australian Social Policy Conference, and 18th Journees Louis-Andre Gerard-Varet international conference in public economics, and seminar participants at the University of Bath, University of Bristol, Institute for Fiscal Studies, City, University of London, and SSE Riga, and the three referees. All opinions and any mistakes are our own. Byline: Agne Suziedelyte [agne.suziedelyte@city.ac.uk] (*,a), Anna Zhu (b,c,d)

Keywords Financial markets; technical and fundamental analysis; probabilistic rule-selection behavior; feedback dynamics; bounded rationality and learning; stylized facts Abstract We propose an empirically motivated financial market model in which speculators rely on trend-following, contrarian and fundamental trading rules to determine their orders. Speculators' probabilistic rule-selection behavior -- the only type of intrinsic randomness in our model -- depends on past and current performance indicators. Our model replicates a number of important stylized facts of financial markets, most noteworthy their approximate random walk price behavior. For a large number of speculators, the model's intrinsic randomness vanishes and its dynamics is driven by an analytically tractable nonlinear map. An in-depth investigation into this map provides the key to understanding how the model functions. Author Affiliation: University of Bamberg, Department of Economics, Feldkirchenstrasse 21, Bamberg 96045, Germany * Corresponding author. Article History: Received 8 February 2021; Revised 30 September 2021; Accepted 3 October 2021 (footnote)[white star] Preliminary versions of our paper were presented at the Tinbergen Institute Complexity Seminar, Amsterdam, November 29, 2017, at the 24th International Conference on Computing in Economics and Finance, June 19--21, 2018, Milan, Italy, and at the 23rd Annual Workshop on Economic Science with Heterogeneous Interacting Agents, June 30, to July 2, 2018, Tokyo, Japan. We thank the participants, in particular Mikhail Anufriev, Roberto Dieci, Reiner Franke, Cars Hommes, Jiri Kukacka, Valentyn Panchenko, Jan Tuinstra, Florian Wagener and Remco Zwinkels, for their helpful feedback. Our paper also benefited from many helpful suggestions by two anonymous referees. Byline: Noemi Schmitt, Frank Westerhoff [frank.westerhoff@uni-bamberg.de] (*)

Keywords Markups; Market power; Average costs; Labour market; Firm size Abstract A recent literature documents a secular increase in the sales-weighted average markup in the United States, a phenomenon that was driven by large and productive firms at the top of the profit distribution. Using rich administrative balance-sheet data, this paper documents the behaviour of markups in Spain before, during, and in the aftermath of the Great Recession. We show that markups rose during the financial crisis. Unlike in the U.S., these dynamics were driven by small and unproductive firms following an increase in their average costs due to a high and increasing share of fixed costs, especially overhead labour expenses. Despite the rise in markups, profit rates fell, especially amongst smaller firms. Author Affiliation: Banco de España DG Economics and Research, Calle Alcalá 48, 28014 Madrid, Spain * Corresponding author. Article History: Received 15 February 2021; Revised 3 September 2021; Accepted 5 October 2021 (footnote)[white star] A previous version of this paper was circulated under the title Raising Markups to Survive: Small Spanish Firms during the Great Recession. For helpful comments and discussions, we would like to thank the co-editor, the associate editor and two anonymous referees, as well as Óscar Arce, Olympia Bover, Eduardo Gutiérrez, Enrique Moral-Benito, Jorge Padilla, Roberto Ramos, Alberto Urtasun, Javier Vallés, and seminar participants at Banco de España, Bank of Portugal, the 44th Simposio de Análisis Económico (Alicante), Funcas, the OECD's Global Forum on Productivity 2020 Annual Conference and the Monetary Policy Committee (MPC) of the European Central Bank. The opinions and analyses are the responsibility of the authors and, therefore, do not necessarily coincide with those of the Banco de España or the Eurosystem. The authors declare that they have no conflicting financial interests to report. This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. Any errors are our own. Byline: Pilar García-Perea [pilargarcia@bde.es], Aitor Lacuesta [aitor.lacuesta@bde.es], Pau Roldan-Blanco [pau.roldan@bde.es] (*)

Keywords Resilience; Psychological health; Major life events; Panel data; Mixture model Abstract There is great interest in understanding who in the population is resilient in the face of major life events, and who is not. In this paper we construct a revealed measure of adulthood psychological resilience by modelling individuals' responses to ten adverse life events using a dynamic finite mixture regression model applied to 17 years of panel data. Our methodology accounts for non-random selection into events, and differences between individuals in anticipation, immediate response, and speed of adaptation. We find considerable heterogeneity in individuals' responses to events such as major financial shocks, redundancy and bereavement. We also find that our measure of resilience is correlated with clinical measures of mental health, and that it significantly predicts the psychological response to out-of-sample events. The strongest predictor of our measure of resilience is internal locus of control, which is an individual's belief that life outcomes are under their control. Author Affiliation: (a) Paris School of Economics and INRAE, France (b) Social Policy, London School of Economics, United Kingdom (c) Prince Mohammad Bin Salman College, Saudi Arabia (d) Centre for Health Economics, Monash University, Australia * Corresponding author. Article History: Received 29 July 2020; Revised 6 September 2021; Accepted 7 September 2021 (footnote) We are grateful to the Australian Research Council for helping to fund this research, and to seminar participants at the London School of Economics and the Paris School of Economics for valuable comments. We would also like to thank Andrew Jones for comments. This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Social Services (DSS) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either DSS or the Melbourne Institute. Byline: Fabrice Etilé (a), Paul Frijters (b,c), David W. Johnston (d), Michael A. Shields [michael.shields@monash.edu] (d,*)

Keywords Welfare criterion; Heterogeneous beliefs; Spurious unanimity; Risk sharing; Pareto optimality; Financial regulation Abstract Belief disagreement generates a fundamental tension between two desirable features of a resource allocation: Pareto optimality and risk sharing. While Pareto optimality generally opposes restrictions to trade, a growing literature rejects it in the presence of heterogeneous beliefs and proposes welfare criteria that instead assume risk sharing as fundamentally desirable. We propose a welfare criterion that balances out these two desirable features by endogenously determining admissible welfare weights based on competitive equilibrium allocation as a benchmark. Applying our method to several belief disagreement models, we show how the welfare-optimal degree of risk sharing is between those suggested by Pareto optimality (which implies less) and by other existing approaches (which imply more). Author Affiliation: (a) Emory University, 1602 Fishburne Drive, Atlanta, GA 30322, United States (b) University of Alabama, United States * Corresponding author. Article History: Received 11 September 2019; Revised 4 September 2021; Accepted 7 September 2021 (footnote)[white star] This paper is a revision of the 2012 working paper solely authored by Jeong Ho (John) Kim, 'Assessing Welfare in Models with Heterogeneous Beliefs.' We thank Faruk Gul, Roland Benabou, Marc Fleurbaey, Kyungmin (Teddy) Kim, Delwin Olivan, Christopher A. Sims, and Tong Xu for helpful comments. Byline: Jeong Ho (John) Kim [jkim230@emory.edu] (*,a), Byung-Cheol Kim (b)

Keywords Gender gap; Health; Risky addictive behaviors Abstract Despite significant improvements in health and longevity, the gender gap in health persists. Using longitudinal data from 15 waves of the HILDA survey for the period from 2005 to 2019, this paper examines the impacts of risky addictive behaviors given by smoking, drinking and gambling on health outcomes and the gender gap in general and mental health in Australia. To identify the causal effects of cigarette and alcohol consumption, we utilize exogeneous policy changes in the Australian Wine Equalization Tax (WET) and cigarette excise taxes to instrument alcohol and cigarette consumption, respectively. For gambling, we utilize state-level number of gambling machines to instrument the problem gambling severity index. We find that Australian females tend to have better general health but worse mental health outcomes than their male counterparts. More importantly, our instrumental variable estimates reveal the role of risky addictive behaviors in influencing the gender gap in health. Specifically, smoking and gambling widen the gender gap in general health, whereas alcohol consumption plays no role in affecting the gender gap in general health. For mental health, our results show that smoking and gambling reduce the gender gap in mental health, whereas alcohol consumption tends to increase the gender gap in mental health. We find that social support, neighborhood trust, dietary choice and life satisfaction are important channels through which risky addictive behaviors influence general and mental health outcomes. Our results have important policy implications as health quality in general, and gender health equality in particular, are important determinants of standards of living, productivity, and economic development. Author Affiliation: (a) Bankwest Curtin Economics Centre, Curtin Business School, Curtin University, Perth, WA, Australia (b) Department of Economics, Monash University, VIC, Australia (c) School of Economics, Finance & Marketing, RMIT University, VIC, Australia * Corresponding author. Article History: Received 31 December 2020; Revised 8 September 2021; Accepted 19 September 2021 (footnote) Disclaimer: This paper uses data from the Household, Income and Labor Dynamics in Australia survey. The Household, Income and Labor Dynamics in Australia Project was initiated and is funded by the Australian Government Department of Social Services and is managed by the Melbourne Institute of Applied Economic and Social Research. The findings and views reported in this paper, however, are those of the authors and should not be attributed to either Department of Social Services or the Melbourne Institute of Applied Economic and Social Research. Byline: Abebe Hailemariam [abebe.hailemariam@curtin.edu.au] (a), Siew Ling Yew [siew.ling.yew@monash.edu] (b,*), Samuelson Appau [samuelson.appau@rmit.edu.au] (c)

Keywords Learning; Reinforcement learning; EWA; Payoff assessment; Identification; Experiment Abstract This paper studies the empirical properties and identification for a broad class of adaptive learning models in games (e.g., experience-weighted attraction (EWA), payoff assessment, and impulse-matching models). I first show that adding a constant c[not equal to]0 to the utility function could affect players' choices during the learning periods. This property is different from standard theories, such as expected utility theory and discrete choice models, where adding c[not equal to]0 preserves the same choice. This result has two further implications. First, the constant c added to the utility function could have a structural interpretation, and this paper discusses how to interpret it. Second, the estimation of learning models usually normalizes the utility of one action profile to be zero (i.e., c=0); for instance, the utility of zero dollars is zero, as commonly imposed in experimental economics. This normalization is innocuous in most applications of discrete choice models but could be misspecified in the context of learning. To deal with the above issue, this paper proposes to specify a player's utility as an unknown function of the action profile, without imposing the above normalization. Equivalently, c is specified as an unknown parameter to be estimated. Under weak conditions, I obtain the joint identification of both utility and learning parameters. Finally, I illustrate the importance of c in the estimation of learning models by conducting a Monte Carlo experiment and revisiting the experimental study by Feri et al. (2010). Author Affiliation: Bank of Canada, Canada Article History: Received 12 November 2020; Revised 14 September 2021; Accepted 21 September 2021 (footnote)[white star] This paper is based on Chapter 3 in my Ph.D. thesis at the University of Toronto. I am grateful to Ryan Webb and other thesis committee members, Victor Aguirregabiria and Yao Luo for their generous support. I thank the Editor Friederike Mengel, the Associate Editor, and two anonymous referees for constructive comments. I also thank Colin Camerer, Jonathan Chiu, Maren Hansen, Cars Hommes, Shota Ichihashi, Janet Jiang, Francisco Rivadeneyra, Halevy Yoram, Yu Zhu and seminar participants at the Bank of Canada, U of Toronto, CEA, ESA Junior Seminar, and ESA Global Conference for helpful discussions. The views in this paper do not necessarily represent the views of the Bank of Canada. Byline: Erhao Xie [erhaoxie@bankofcanada.ca]

In Final Offer Arbitration, both parties submit a proposal to an arbitrator. In the event the parties cannot reach a negotiated settlement, the arbitrator chooses the submitted proposal that is closest to her preferred settlement. In such a model, asymmetric information can lead to costly bargaining failure. Voluntary disclosure of private information has the potential to eliminate disputes which would otherwise arise. However, the timing of this information transmission is crucial, because information can be used by the previously uninformed party to submit a superior proposal to the arbitrator. Thus, there is an incentive to conceal information if it is to be revealed prior to the submission of proposals to the arbitrator. However, information transmission should occur if it takes place after the submission of these proposals. In this paper, we test this theory experimentally and find individuals with a strong case reveal their private information in 40% of negotiations when revelation comes prior to the submission of proposals and in 60% of negotiations when revelation comes after the submission of these proposals. Moreover, information disclosure by a party with favorable information increases the rate of settlement as predicted by the theory. Author Affiliation: (a) Department of Economics, Finance and Legal Studies, University of Alabama, United States (b) Department of Economics, Finance and Legal Studies, University of Alabama, United States (c) Department of Economics, University of Mississippi, United States * Corresponding author. Article History: Received 19 January 2021; Revised 28 July 2021; Accepted 20 August 2021 (footnote) We thank Kevin Pflum for helpful discussions regarding the empirical usage of Final-Offer Arbitration. We also thank an anonymous referee, Cary Deck, Shahar Dillbary, Daniela Puzzelo, Matt Van Essen, and participants of the American Law and Economics Association, Southern Economics Association and Midwest Law and Economics Meetings for providing helpful comments on the paper. In addition, we thank the Department of Economics, Finance and Legal Studies at the University of Alabama for providing funding for our experiments. Byline: Paul Pecorino [ppecorin@cba.ua.edu] (a), Michael Solomon [mhsolomon@cba.ua.edu] (b,*), Mark Van Boening [bmvan@olemiss.edu] (c)