Publications
Fairness in Incomplete Information Bargaining
with Bradley Larsen, Shengwu Li, J.J. Prescott, Bernardo Silveira, and Chuan Yu
Accepted, Journal of International Economics
This paper documents a robust pattern from diverse sequential bargaining settings: agents favor offers that split the difference between the previous two offers. Our settings include price negotiations, insurance claims, trade tariffs, and even a TV game show. We argue that classical game theory cannot convincingly explain these findings. Instead, we propose a robust-inference argument under which the two last offers might bound potential surplus. Split-the-difference offers can then be viewed as a fair division. Consistent data patterns in each setting point to split-the-difference offers as a strong bargaining norm.
with Abhijit Banerjee, Esther Duflo, Raghabendra Chattopadhyay and Nina Singh
American Economic Journal – Economic Policy, Vol. 13, No. 1, February 2021
The role of good management practices in organizations has recently been emphasized. Do the same principles also apply in government organizations, even the most bureaucratic and hierarchical of them? And can skilled, motivated managers identify how to improve these practices, or is there a role for outsiders to help them in this task? Two unique large-scale randomized trials conducted in collaboration with the state police of Rajasthan, India sought to increase police efficiency and improve interactions with the public. In a sample of 162 police stations serving almost 8 million people, the first experiment tested four interventions recommended by police reform panels: limitations of arbitrary transfers, rotation of duty assignments and days off, increased community involvement, and on-duty training. Field experience motivated a novel fifth intervention: "decoy" visits by field officers posing as citizens attempting to register cases, which gave constables incentives to behave more professionally. Only two of these, training and decoy visits, had robust impacts. The other three, which could have reduced middle managers' autonomy, were poorly implemented and ineffective. Building upon these findings, we designed a second experiment that provided explicit incentives to police officers to carry out sobriety traffic checkpoints and did not rely on middle managers. Linking good performance with the promise of a transfer from the reserve barracks to a desirable police station posting, these incentives worked within existing organizational constraints and had very large effects on performance.
with Hunt Allcott
Review of Economic Studies, Vol. 85, No 2 (April), pages 596-731
Do natural resources benefit producer economies, or is there a "Natural Resource Curse," perhaps as Dutch Disease crowds out manufacturing? We combine new data on oil and gas abundance with Census of Manufactures microdata to estimate how oil and gas booms have affected local economies in the United States since the 1970s. Migration does not fully offset labor demand growth, so local wages rise. Notwithstanding, manufacturing is actually pro-cyclical with resource booms, driven by growth in upstream and locally-traded sectors. The results highlight how many manufacturers produce locally-traded goods and how natural resource linkages can drive manufacturing growth.
Creative Destruction: Barriers to Urban Growth and the Great Boston Fire of 1872
with Richard Hornbeck
American Economic Review, 107(6), pp. 1-35
Historical city growth, in the United States and worldwide, has required remarkable transformation of outdated durable buildings. Individual reconstruction decisions may be inefficient and restrict growth, however, due to externalities and transaction costs. This paper analyzes new plot-level data in the aftermath of the Great Boston Fire of 1872, estimating substantial economic gains from the created opportunity for widespread reconstruction. An important mechanism appears to be positive externalities from neighbors' reconstruction. Strikingly, impacts from this opportunity for widespread reconstruction were sufficiently large that increases in land values were comparable to the previous value of all buildings burned.
with K. Sudhir, Joe Priester, Matt Shum, David Atkin, Andrew Foster, Ganesh Iyer,Ginger Jin, Shinobu Kitayama, Mushfiq Mobarak, Yi Qian, Ishani Tewari, Wendy Wood
Customer Needs and Solutions
December 2015, Volume 2, Issue 4, pp 264–276
Emerging markets are fast-growing developing countries that are creating not only a rapidly expanding segment of middle class and rich consumers but also have a sizable segment of "poor" consumers. This paper presents an inter-disciplinary perspective integrating insights from quantitative and behavioral marketing, social psychology, industrial organization, and development economics with the purpose of generating and answering research questions on emerging markets. We organize our discussion around three themes. First, there is substantial heterogeneity in the social, cultural, economic, and institutional environments as well as rapid change in these characteristics. Coupled together, the heterogeneity and dynamics increase the scope of variables and inter-relationships that have traditionally been investigated. Second, emerging markets continue to have sizeable "poor" and rapidly growing "new rich" populations, requiring marketers and researchers to understand how to market to the poor and the "new rich." Exploiting these features in research can help deepen our theoretical understanding of markets and marketing. Third, from a methodological perspective, differences in types of available secondary data and the lower cost of collecting primary data create opportunities to develop new approaches for addressing research questions. We also encourage scholars to move beyond cross-country regressions offering broad-brush exploratory insight, to country-industry-specific research that exploits unique characteristics of a particular emerging market.
Can Informational Campaigns Raise Awareness and Local Participation in Primary Education?
with Abhijit Banerjee, Rukmini Banerji, Esther Duflo, Rachel Glennerster, Stuti Khemani and Marc Shotland
Economic and Political Weekly
Vol. 42, No. 15 (Apr. 14-20, 2007), pp. 1365-1372
A central plank of public policy for improving primary education services in India is the participation of village education committees, consisting of village government leaders, parents, and teachers. This paper reports the findings from a survey in a rural district in Uttar Pradesh. Rural households, parents, teachers and VEC members were surveyed on the status of education services and the extent of community participation in the public delivery of education services. Most parents do not know that a VEC exists, public participation in improving education is negligible, and large numbers of children in the villages have not acquired basic competencies of reading, writing, and arithmetic. Based on the findings of the baseline survey, this paper also describes a set of information and advocacy campaigns that have been designed to explore whether local participation can increase, and future research plans to evaluate the impact of these interventions.