Econ 605_Advanced Microeconomics_2020_syl 1/13/20 9:30 AM

Spring 2020 DUKE UNIVERSITY

Department of Economics

Economics 605: ADVANCED MICROECONOMIC THEORY

Professor: Charles Becker Telephone: 919-660-1885 Email: cbecker@duke.edu

Office: 312 Social Sciences Office Hours: by appointment Class: Monday and Wednesday 4:40 – 5:55 Social Sciences 311 TA & presentation sessions Tuesday-Thursday 4:40-5:55 Social Sciences 311 Teaching Assistants: Jeffrey Hill jeffrey.hill@duke.edu Xiaonan Hong xiaonan.hong@duke.edu Sahil Khatkar sahil.khatkar@duke.edu

1. Course description. This course provides an overview of major theoretical contributions using microeconomic theory along with an introduction to dynamic optimization. The course is intended to give participants a sense of different fields in microeconomics – labor, health, industrial organization, international trade, economic development, urban economics, and more. In the process, students will gain an appreciation of modeling approaches.

2. Prerequisites. Econ 601 or equivalent. Working knowledge of multivariate calculus is necessary; some

matrix algebra and a cursory overview of the first chapters of a differential equations text will be needed as well. Students are assumed to be familiar with Varian’s Microeconomic Analysis (Ed. 3) or a comparable text like Jehle & Reny: you should own a copy for reference purposes.

3. Texts and readings. There are no texts. Readings (usually) will be posted on Sakai. Instead, the course

consists of a vast number of required readings, which each student is expected to cover thoroughly with an eye to content, theory, model, and econometric technique. There are many papers by Nobel Laureates on the reading list. During the course of the term the list will evolve. It is not possible to cover more than one reading per class period, and so some of the papers will be cut, depending on student interest and what we deem essential and feasible.

4. Honor code and course policies. Failure to acknowledge assistance on an assignment, or to cite a

source of information used in an assignment, or to represent the work of others as your own, constitutes a violation of the University's honor code. Any violations may result in failure of the assignment or the course, or expulsion from the University. Any exam missed for a non-legitimate reason will be accorded the grade of 0. Any exam missed for a legitimate reason will be made up with an oral exam as soon as it can be scheduled by EcoTeach. Late work will be penalized by 1/3 grade point per day late (excluding Sundays). Presentation notes must be posted on Sakai at least 24 hours prior to the class at which the presentation will take place.

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5. Grading, assignments, presentations, and attendance. The grades will be determined as weighted averages of exams and presentations:

Class participation 8% In-class presentations and supporting notes (3 to 4 per team) 32% Midterm examination 24% Final examination or original theory paper 36%

Students also may choose whether to write an original theory paper or to take the final exam. A decision on this choice must be reported to the faculty and TAs by Wednesday April 1. In order to receive capstone credit for this course you must write a theory paper. Theory papers are due 24 hours prior to the final exam.

6. Presentations and class conduct.

To enhance the efficiency of class presentations, each team (3 people) of presenters is expected to prepare a handout for distribution to the entire class. The handout should contain pertinent aspects of the formal presentation to avoid having to write out lots of equations in class. Even if you are not a presenter, you are expected to have read the article in detail before class. The presenters will (a) provide detailed mathematical derivations and (b) make critical analytical comments as well as simply presenting the paper; other students should be prepared to discuss the article. At times, the professors will provide brief background lectures on related literature. The intention is to provoke discussion, and for the presenter to discuss new techniques, modeling approaches, data sets, and findings, as well as to discuss shortcomings. The exact design of the course will depend on final enrolment. I anticipate a class of roughly 8 groups. This means that there will be approximately: 4 lectures by faculty and TAs, 1 exam class, at least 2 review sessions, 1 homework session, 1 post-midterm session, and 24 presentations for a total of 33 meetings. We have 26 regular class sessions and (since there will be none during the first week) 24 presentation/TA sessions. Students are expected to attend the lectures, the exam, and 25 presentations. We will keep track of attendance and, while exams will have some options, we expect you to attend at least 75% of peer presentations. Note also that a large share of the papers on the reading list already have presentations posted online. Each team is expected to present:

One “difficult” (we’ll define these) paper that has not previously been presented;

One “easy” paper that has not already been presented, or a re-presentation of a more difficult paper for which notes already exist;

One or two elective papers In addition to student presentations, your instructors will provide mini-presentations of papers we regard as key that are not covered by students, and also will provide background on related papers when appropriate.

Readings (yellow highlight denotes a paper we would very much like to cover – notes are already available on the class website in almost all cases – though since there are 22 that are highlighted, the instructors will present some briefly).

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I. DYNAMICS AND GETTING STARTED (AND OTHER INTERESTING PAPERS…) Bramoullé, Yann, and Lorenzo Ductor. "Title length." Journal of Economic Behavior & Organization 150 (2018): 311-324. Fryer, Roland, and Steven Levitt, 2013, “Hatred and profits: under the hood of the Ku Klux Klan,” Quarterly Journal of

Economics. Hall, Robert E., 1988, “Intertemporal substitution in consumption,” Journal of Political Economy 96(2): 339-357. Intriligator, Michael. 1971. Mathematical Optimization & Economic Theory. Prentice-Hall, Chs. 11-13. Iyer, Sriya. "The New Economics of Religion." Journal of Economic Literature 54.2 (2016): 395-441. Leijonhufvud, Axel, 1973, “Life among the econ,” Western Economic Journal 11(3): 327-337. Lopez-Perez, Raul, and Eli Spiegelman, 2012, “Do economists lie more?” Universidad Autonoma de Madrid,

Date Paper group reading number

Jan 8 Wed Courant, racial prejudice in a search model, J Urban Econ , 1978 Becker 1

Spence, signaling, QJE , 1973 Becker 2

Jan 9 Thu LaTeX intro Hill

Jan 13 MonIncome-share agreements on the job market

https://sites.duke.edu/joshuajacobs/files/2019/10/jmp.pdf Joshua Jacobs (PhD student) 3

Jan 15 Wed Becker & Murphy, rational addiction, JPE , 1988 Hong 4

Jan 16 Thu Becker & Lewis, quality & quantity of children, JPE , 1974 Hill 5

Jan 21 Tue Tirole Khatkar 6

Jan 22 Wed dynamic programming I Hong

Jan 23 Thu Kahneman & Tversky, prospect theory, Econometrica 1979 Becker 7

Akerlof & Dickens, cognitive dissonance, AER , 1982 Becker 8

Jan 27 Mon dynamic programming II Hill, Hong, & Khatkar

Jan 29 Wed

Jan 30 Thu

Feb 3 Mon

Feb 5 Wed

Feb 6 Thu

Feb 10 Mon

Feb 12 Wed

Feb 13 Thu

Feb 17 Mon

Feb 19 Wed

Feb 20 Thu

Feb 24 Mon

Feb 26 Wed

March 2 Mon

March 4 Wed

March 5 Thu

March 9, 11, 12 Spring break

March 16 Mon

March 18 Wed Mid-term exam

March 23 Mon

March 25 Wed

March 27 Thu

March 30 Mon

April 1 Wed

April 2 Thu

April 6 Mon

April 8 Wed

April 9 Thu

April 13 Mon

April 15 Wed

April 27 Monday Final exam 2:00 – 5:00 pm

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Departamento de Analisis Economico, working paper 4/2012. Radford, R.A., 1945, “Economic organization of a POW camp,” Economica 12(48): 189-201. Roth, Alvin E. "Marketplaces, markets, and market design." American Economic Review 108.7 (2018): 1609-58. Schultze Charles L. and Daniel H. Newlon, 2011, Ten Years and beyond: Economists Answer NSF’s Call for Long-Term Research

Agendas. Arlington, VA: National Science Foundation. Siegfried, John, 1970, “A first lesson in econometrics,” Journal of Political Economy 78(6) 1378-1379. Stratton, I.M. and A. Neil, 2004, “How to ensure your paper is rejected by the statistical reviewer,” Diabetic Medicine 22:

371-373. Thaler, Richard H. 2018. "From Cashews to Nudges: The Evolution of Behavioral Economics." American Economic

Review, 108 (6): 1265-87. Thomson, William, 1999, “The young person’s guide to writing economic theory,” Journal of Economic Literature 37(1):

157-183.

II. RISK & UNCERTAINTY

George, Akerlof. "The market for ‘Lemons’: Quality uncertainty and the market mechanism." Quarterly Journal of Economics 84.3 (1970): 488-500.

Auster, Sarah, and Piero Gottardi. "Competing mechanisms in markets for lemons." Theoretical Economics 14.3 (2019): 927-970.

Farhi, Emmanuel and Jean Tirole, 2012, “Collective moral hazard, maturity mismatch, and systemic bailouts,” American Economic Review 102(1): 60-93.

Philippson, Thomas and Vasiliki Skreta, 2012, “Optimal interventions in markets with adverse selection,” American Economic Review 102(1): 1-28.

Rothschild, Michael and Joseph Stiglitz. 1976. “Equilibrium in competitive insurance markets: An essay on the economics of imperfect information,” Quarterly Journal of Economics 90(4): 629-649.

Stiglitz, Joseph and Andrew Weiss, 1981, “Credit rationing in markets with imperfect information,” American Economic Review 71(3): 393-410.

Tirole, Jean, 2012, “Overcoming adverse selection: how public intervention can restore market functioning,” American Economic Review 102(1): 29-59.

III. HEALTH

Becker, G. S. and K. Murphy. 1988. “A theory of rational addiction.” Journal of Political Economy 96, 675-700. Erlich, Isaac and Hiroyuki Chuma, 1990, “A model of the demand for longevity and the value of life extension” Journal

of Political Economy 98(4): 761-782. Galeotti, Andrea and Brian Rogers, 2013, Strategic immunization and group structure, American Economic Journal –

Microeconomics 5(2). Grossman, Michael, 1972, “On the concept of health capital and the demand for health,” Journal of Political Economy 82:

233-255. Kremer, Michael. "Integrating behavioral choice into epidemiological models of AIDS." Quarterly Journal of Economics

111, no. 2 (1996). Ma, Albert Ching-to and Thomas McGuire, 1997, “Optimal health insurance and provider payment,” American Economic

Review 87(4): 685-704. McGuire, Thomas G., and Mark V. Pauly. "Physician response to fee changes with multiple payers." Journal of Health

Economics 10, no. 4 (1991): 385-410 Munz, Philip et al.., 2009. Ch. 4 (generalized model of infectious disease) in Tchuenche, JM and C. Chiyaka, Eds. Infectious

Modeling Research Progress, Nova Science. Rosen, Sherwin, 1988, “The value of changes in life expectancy,” Journal of Risk & Uncertainty 1: 285-304.

IV. ECONOMICS OF THE HOUSEHOLD & LABOR MARKETS

Akerlof, George A. "Labor contracts as partial gift exchange." The quarterly journal of economics 97.4 (1982): 543-569. Arcidiacono, Peter, Andrew Beauchamp, and Marjorie McElroy. "Terms of endearment: An equilibrium model of sex

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and matching." Quantitative Economics 7.1 (2016): 117-156. Becker, Gary, 1973, “A theory of marriage: part I,” Journal of Political Economy 81(4): 813-846

Becker, Gary, 1974, “A theory of marriage: part II,” Journal of Political Economy 82(2): S11-S26. Becker, Gary, 1968, “Crime and punishment: an economic approach,” Journal of Political Economy 76: 169-217. Becker, Gary, and H. Greg Lewis, 1973, “On the interaction between the quality and quantity of children,” Journal of

Political Economy 81: S279-S288. Bergstrom, Theodore, 1989, “A fresh look at the rotten kid theorem,” Journal of Political Economy, 97(5) 1138-1159. See

iff class of functional forms, Proposition 2. http://works.bepress.com/ted_bergstrom/9/ Bordon, Paola, and Chao Fu. "College-major choice to college-then-major choice." Review of Economic Studies 82.4 (2015):

1247-1288. Boulier, Bryan L. and Mark R. Rosenzweig, (1984) “Schooling, search, and spouse selection: testing economic theories

of marriage and household behavior, Journal of Political Economy, 92(4):712-732. Chiappori, Pierre-Andre, Bernard Fortin, and Guy Lacroix. "Marriage market, divorce legislation, and household labor

supply." Journal of political Economy 110.1 (2002): 37-72. Chiappori, Pierre-Andre, Murat Iyigun, and Yoram Weiss. "Investment in schooling and the marriage market." American

Economic Review 99.5 (2009): 1689-1713. De la Croix, David and Fabio Mariani, 2015, From polygyny to serial monogamy: a unified theory of marriage

institutions, Review of Economic Studies 82(2). Diamond, Peter and Botond Köszegi, 2003, “Quasi-hyperbolic discounting and retirement,” Journal of Public Economics 87: 1839-1872.

Dupuy, Arnaud and Alfred Galichon, 2014, Personality traits and the marriage market, Journal of Political Economy 122(6). Gronau, Rubin, 1976, “Leisure, home production and work: the theory of the allocation of time revisited,” Journal of

Political Economy, 85(6). Hopkins, Ed. "Job market signaling of relative position, or Becker married to Spence." Journal of the European Economic

Association 10, no. 2 (2012): 290-322. Immorlica, Nicole, Rachel Kranton, and Greg Stoddard, “Striving for Status,” unpublished ms., 2012. Lam, David, 1984 “Marriage Markets and assortative mating with household public goods: Theoretical results and

empirical implications,” Journal of Human Resources, 23(4):462-487. Maccheroni, Fabio, and Massimo Marinacci, 2012, “Social decision theory: choosing within and between groups,” Review

of Economic Studies 79: 1591-1636. McElroy, M. B., and Mary Jean Horney, "Nash-bargained household decisions: toward a generalization of the theory of

consumer demand," International Economic Review 22(2):333-349. McGuire, Thomas G., and Mark V. Pauly, 1991, "Physician response to fee changes with multiple payers." Journal of

Health Economics 10(4). Maestri, Lucas, 2012, “Bonus payments vs. efficiency wages in the repeated principal agent model with subjective

evaluations,” American Economic Journal: Microeconomics 4(3): 34-56. Matouschek, Niko and Imran Rasul (2008), “The economics of the marriage contract: theories and evidence,” Journal of

Law and Economics, 51: 59-110. http://www.ucl.ac.uk/~uctpimr/research/JLE_marriage.pdf Mell, Andrew, 2011, “Are ‘gangstas’ peacocks? The handicap principle and illicit markets,” Oxford, UK: University of

Oxford Department of Economics discussion paper. Mookherjee, Dilip, Silvia Prina, and Debraj Ray, 2012, “A theory of occupational choice with endogenous fertility,”

American Economic Journal: Microeconomics 4(4): 1-34. Mortensen, Dale and Tara Vishwanath, 1994, “Personal contacts and earnings: It is who you know,” Labour Economics

1: 187-201.

Spence, Michael, 1973, “Job market signaling,” Quarterly Journal of Economics 87(3): 355-374. [Becker, reading 7] Streufert, Peter, “The effect of underclass social isolation on schooling choice,” 2000, Journal of Public Economic Theory 2(4): 461-482.

Willis, Robert T. “A theory of out-of-wedlock childbearing,” 1999, Journal of Political Economy, 107(6): S33-S64

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V. ECONOMIC DEVELOPMENT Ahlin, Christian and Robert Townsend, 2007, “Using repayment data to test across models of joint liability lending,”

Economic Journal 117(517): F11-F51. [] Banerjee, Abhijit and Sendhil Mullainathan, 2010, “The shape of temptation: implications for the economic lives of the

poor,” Cambridge, MA: NBER working paper 15973. Bardhan, Pranab, Dilip Mookherjee, and Masatoshi Tsumagari, 2013, “Middlemen margins and globalization,” American

Economic Journal – Microeconomics 5(4): 81-119. Bardhan, Pranab, 1979 (June). “Wages and unemployment in a poor, agrarian economy,” Journal of Political Economy 87(3):

479-500. Basu, Karna, 2011, “Hyperbolic discounting and the sustainability of rotational savings arrangements,” American Economic Journal – Microeconomics 3(4): 143-171. Dixit, Avinash. 1969 “Marketable surplus and dual development.” Journal of Economic Theory 1: 203-219.

Fafchamps, Marcel. "Risk sharing between households." Handbook of social economics. Vol. 1. North-Holland, 2011. 1255-1279. http://www.economics.ox.ac.uk/members/marcel.fafchamps/homepage/

Ishiguro, Shingo. "Relationships and Growth: On the Dynamic Interplay between Relational Contracts and Competitive Markets in Economic Development." Review of Economic Studies 83.2 (2016): 629-657.

Kalemli-Ozcan, Sebnem, Harl Ryder, and David Weil, 2000, “Mortality decline, human capital investment, and economic growth,” Journal of Development Economics 62(1): 1-23. Nguyen, Quang, Marie Claire Villeval, and Hui Xu. "Trust under the prospect theory and quasi-hyperbolic preferences:

a field experiment in Vietnam." Economic Development and Cultural Change 64, no. 3 (2016): 545-572 Stiglitz, Joseph, 1969. “Rural-urban migration, surplus labour, and the relationship between urban and rural wages,”

Eastern Africa Economic Review 1: 1-27. Stiglitz, Joseph, 1974, “Alternative theories of wage determination and unemployment in LDCs: the labor turnover

model,” Quarterly Journal of Economics 81: 194-227. [] Wang, Xiao Yu. "Policy-Making and the Adaptability of Informal Institutions." World Bank Economic Review 29, no. suppl

1 (2015): S174-S181. Wang, Xiao Yu, 2015, “Endogenous insurance and informal relationships,” unpublished manuscript, Durham, NC:

Duke University Department of Economics. VI. FIRMS, INFORMATION, GOODS, & MECHANISM DESIGN

Abdulkadiroglu, Atila and Tayfun Sonmez, 2003, School choice: a mechanism design approach, American Economic Review 93(1): 729-747.

Alchian, Armen and Harold Demsetz, 1972, “Production, information costs, and economic organization,” American Economic Review 62(5): 777-795.

Ambrus, Attila, Eduardo Azevedo, and Yuchiro Kamada, “Hierarchical cheap talk,” Theoretical Economics, 2013. Athey, Susan, and Armin Schmutzler, 1995, “Product and process flexibility in an innovative environment,” Rand Journal

of Economics 26(4): 557-574. Attar, Andrea, Catherine Casamatta, Arnold Chassagnon, and Jean-Paul Décamps. "Multiple Lenders, Strategic Default,

and Covenants." American Economic Journal: Microeconomics 11, no. 2 (2019): 98-130. Bar-Gill, Oren, and Nicola Persico. "Exchange Efficiency with Weak Ownership Rights." American Economic Journal:

Microeconomics. 8(4) 2016 Baron, David and Roger Myerson, 1982, “Regulating a monopolist with unknown costs,” Econometrica 50(4): 911-930. Baumol, William J. and Robert D. Willig, 1981, “Fixed costs, sunk costs, entry barriers, and sustainability of monopoly,”

Quarterly Journal of Economics 96(3): 405-431. Ben Porath, Elchanan, Eddie Dekel, and Barton Lipman, 2014, “Optimal allocation with costly verification,” American

Economic Review 104(12): 3779-3813. Benabou, Roland, 2013, “Groupthink: collective delusions in organizations and markets,” Review of Economic Studies 80(2):

429-462. Chen, Cheng, and Wing Suen. "The Comparative Statics of Optimal Hierarchies." American Economic Journal: Microeconomics 11.2 (2019): 1-25.

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Diamond, Peter, 1967, “The role of a stock market in a general equilibrium model with technological uncertainty,” American Economic Review 57(4): 759-776. Dur, Umut, A. Arda Gitmez, and Özgür Yılmaz. "School choice under partial fairness." Theoretical Economics 14.4 (2019): 1309-1346. Hartline, Jason and Brendan Lucier, 2015, Non-optimal mechanism design, American Economic Review 105(10). Holmstrom, Bengt and Paul Milgrom, 1991, “Multitask principal-agent analyses: incentive contracts, asset ownership, and job design,” Journal of Law, Economics & Organization 7(special issue): 24-52. Heidhues, Paul, Botond Koszegi, and Takeshi Murooka. "Inferior products and profitable deception." REStud 84(1)

(2017). Kamenica, Emir, and Matthew Gentzkow. "Bayesian persuasion." The American Economic Review 101, no. 6 (2011): 2590-

2615. Lewis, Tracy and Huseyin Yildirim, 2002, “Managing dynamic competition,” American Economic Review 92(4): 779-797. McAdams, David, 2011, “Performance and turnover in a stochastic partnership,” American Economic Journal –

Microeconomics 3(4): 107-142. Milgrom, Paul and John Roberts, 1990, “The economics of modern manufacturing: technology, strategy, and organization,” American Economic Review 80(3): 511-528 Milgrom, Paul and Robert Weber, 1982, “A theory of auctions and competitive bidding,” Econometrica 50(5): 1089-1122. Mirman, Leonard, Larry Samuelson, and Amparo Urbano, 1993, “Monopoly experimentation,” International Economic

Review 34(3): 549-563. Panzar, John C. and Robert D. Willig, 1977, “Free entry and the sustainability of natural monopoly,” Bell Journal of Economics 8(1): 1-22.

Parenti, Mathieu, Philip Ushchev, and Jacques-François Thisse. "Toward a theory of monopolistic competition." Journal of Economic Theory 167 (2017): 86-115. Prat, Andrea, 2005, “The wrong kind of transparency,” American Economic Review 95(3): 862-877. Radner, Roy, 1968, “Competitive equilibrium under uncertainty,” Econometrica 36(1): 31-58. Rubinstein, Ariel and Asher Wolinsky, 1985, “Equilibrium in a market with sequential bargaining,” Econometrica 53(5):

1133-1150. Stigler, George, 1961, “The economics of information,” Journal of Political Economy 69(3): 213-225. Stiglitz, Joseph and Avinash Dixit, 1977, “Monopolistic competition and optimum product diversity,” American Economic

Review 67: 297-308. Taylor, Curtis, 1999, “Time-on-the-market as a sign of quality,” Review of Economic Studies 66(3): 555-578.

VII. BARGAINING THEORY

Abdulkadiroğlu, Atila, and Kyle Bagwell, 2013, “Trust, reciprocity, and favors in cooperative relationships,” American Economic Journal – Microeconomics 5(2): 213-259.

Ambrus, Attila, Eric Chaney, and Igor Salitskiy. "Pirates of the Mediterranean: An empirical investigation of bargaining with asymmetric information." Quantitative Economics 9.1 (2018): 217-246.

Athey, Susan, 2001, “Single crossing properties and the existence of pure strategy equilibria in games of incomplete information,” Econometrica 69(4): 861-889.

Au, Pak Hung. "The loser's curse in the search for advice." Theoretical Economics 14.3 (2019): 1015-1061. Au, Pak Hung, and Jipeng Zhang. "Deal or no deal? The effect of alcohol drinking on bargaining." Journal of Economic

Behavior & Organization 127 (2016): 70-86. Baliga, Sandeep, and Jeffrey C. Ely. “Torture and the Commitment Problem.” Review of Economic Studies. (2016) 83:1406-

1439. Baron, D. and Ferejohn J., 1989, “Bargaining in legislatures,” American Political Science Review, 83:4, 1181-1206. Binmore K., Rubinstein A. and A. Wolinsky, 1986, “The Nash bargaining solution in economic modeling,” Rand Journal

of Economics, 17:2, 176-188. Dal Bó, Pedro, and Guillaume R. Fréchette. "Strategy Choice in the Infinitely Repeated Prisoner's Dilemma." American

Economic Review 109.11 (2019): 3929-52. Choo, Eugene and Aloysius Siow, 2006, “Who marries whom and why,” Journal of Political Economy 114: 172-201.

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Cripps, Martin W., and Caroline D. Thomas. "Strategic experimentation in queues." Theoretical Economics 14.2 (2019): 647-708.

Deb, Joyee, and Julio González‐Díaz. "Enforcing social norms: Trust‐building and community enforcement." Theoretical Economics 14.4 (2019): 1387-1433.

Fudenberg, Drew, and Emanuel Vespa. "Learning Theory and Heterogeneous Play in a Signaling-Game Experiment." American Economic Journal: Microeconomics 11.4 (2019): 186-215.

Green, Edward and Robert Porter, 1984, “Noncooperative collusion under imperfect price information,” Econometrica 52(1): 87-100.

Halac, Marina, 2012, “Relational contracts and the value of relationships,” American Economic Review,” 102(2): 750-779. Kalai, E. and Smorodinsky, M., 1975, “Other solutions to Nash's bargaining problem,” Econometrica 43, 513-518. Kıbrıs Ö and Tapkı İ.G., 2010, “Bargaining with nonanonymous disagreement: Decomposable Rules,” Games &

Economic Behavior, 68(1), 233-241 Kreps, David, Paul Milgrom, John Roberts, and Robert Wilson, 1982, “Rational cooperation in the finitely repeated

prisoner’s dilemma,” Journal of Economic Theory 27(2): 245-252. [TBD]

Levhari, David and Leonard Mirman, 1980, “The great fish war: an example using a dynamic Cournot-Nash solution,” Bell Journal of Economics 11(1): 322-334.

Von Thadden, Ernst-Ludwig, and Xiaojian Zhao, 2012, “Incentives for unaware agents,” Review of Economic Studies 79:1151-1174.

VIII. SINGLE PEAKED PREFERENCES Bade, Sophie. "Matching with single-peaked preferences." Journal of Economic Theory (2018). Kıbrıs Ö. and Küçükşenel S., 2009, “Uniform trade rules for uncleared markets”, Social Choice and Welfare, 32(1) Moulin, H., 1980, “On strategy-proofness and single peakedness,” Public Choice, 35(4): 437-455.

Sprumont, Y., 1990, “The division problem with single peaked preferences: a characterization of the uniform allocation rule,” Econometrica 59(2): 509-519.

IX. MANIPULATION OF ALLOCATION RULES Hurwicz, L., 1972, "On informationally decentralized systems", in Decision and Organization (McGuire and Radner, Eds.),

pp.297-336, North-Holland, Amsterdam. Maniquet, F., Sprumont, Y., 1999, "Efficient strategy-proof allocation functions in linear production economies,"

Economic Theory 14: 583--595. Serizawa, S., 1999, "Strategy-proof and symmetric social choice functions for public good economies," Econometrica 67:

121--145. Taylor, Curtis, 1995, “Digging for golden carrots: an analysis of research tournaments,” American Economic Review 85(4):

872-890. Taylor, Curtis, and Huseyin Yildirim, 2010, “Subjective performance and the value of blind evaluation,” Review of

Economic Studies 78: 762-794. Zhou, L., 1991, "Inefficiency of strategy-proof allocation mechanisms in pure exchange economies," Social Choice and

Welfare, 8:247-257. X. MATCHING

Abdulkadiroğlu A. and T. Sönmez, 1998, “Random serial dictatorship and the core from random endowments in house allocation problems," Econometrica 66: 689-701.

Abdulkadiroglu, Atila, Yeon-Koo Che, and Yosuke Yasuda, 2015, Expanding “choice” in school choice, American Economic Journal – Microeconomics 7(1).

Ahlin, Christian. 2017. "Matching Patterns When Group Size Exceeds Two." American Economic Journal: Microeconomics, 9 (1): 352-84.

Antler, Yair, 2015, Two-sided matching with endogenous preferences, American Economic Journal – Microeconomics 7(3).

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Ashlagi, Itai and Alvin Roth, 2014, Free riding and participation in large-scale, multi hospital kidney exchange, Theoretical Economics 9.

Banerjee, Abhijit, Esther Duflo, Maitreesh Ghatak, and Jean LaFortune, 2013, Marry for what? Caste and mate selection in modern India, American Economic Journal – Microeconomics 5(2).

Chiappori, Pierre-André, Sonia Oreffice, and Climent Quintana-Domeque. "Fatter attraction: anthropometric and socioeconomic matching on the marriage market." Journal of Political Economy 120.4 (2012): 659-695.

Chiappori, Pierre-André, Monica Costa Dias, and Costas Meghir. "The Marriage Market, Labor Supply, and Education Choice." Journal of Political Economy 126.S1 (2018): S26-S72.

Choo, Eugene. "Dynamic marriage matching: An empirical framework." Econometrica 83.4 (2015): 1373-1423. Gale D. and Shapley L., 1962, “College Admissions and the Stability of Marriage,” American Mathematical Monthly 69: 9-15. Haeringer, Guillaume, and Vincent Iehlé. "Two-sided matching with (almost) one-sided preferences." American Economic Journal: Microeconomics 11.3 (2019): 155-90.

Hatfield J.W. and Milgrom P., 2005, “Matching with contracts,” American Economic Review 95: 913-935. Hylland, A. and R. Zeckhauser, 1979, "The efficient allocation of individuals to positions," Journal of Political Economy 87: 293-314.

Kelso, A. S. and Crawford, V. P., 1982, “Job matchings, coalition formation, and gross substitutes,” Econometrica 50: 1483-1504.

Roth, Alvin, Tayfun Sonmez, and M. Utku Unver, 2004, “Kidney exchange,” Quarterly Journal of Economics, 119(2): 457-488. http://kuznets.fas.harvard.edu/~aroth/alroth.html

Sautmann, Anja. 2017. "Age-Dependent Payoffs and Assortative Matching by Age in a Market with Search." American Economic Journal: Microeconomics, 9 (2): 263-94.

Shapley L. and Shubik M., 1972, “The assignment game I: the core,” International Journal of Game Theory 1: 111-130. Shapley, L. and H. Scarf, 1974, "On cores and indivisibility." Journal of Mathematical Economics 1: 23-28. Sönmez T. and Switzer T., 2013, “Matching with branch-of-choice contracts at the United States Military

Academy,” Econometrica. Sönmez T., 2013, “Bidding for army career specialties: improving the ROTC branching mechanism,” Journal of Political Economy. Sonmez, Tayfun and M. Utku Unver, 2014, “Altruistically unbalanced kidney exchange,” Journal of Economic Theory 152.

Sönmez, Tayfun, M. Utku Ünver, and Özgür Yılmaz. "How (not) to integrate blood subtyping technology to kidney exchange." Journal of Economic Theory 176 (2018): 193-231.

Ünver, M. Utku. "Dynamic kidney exchange." Review of Economic Studies 77, no. 1 (2010): 372-414. Wang, Xiao Yu, 2013, “Interdependent utility and truth-telling in two-side matching,” unpublished manuscript,

Durham, NC: Duke University Department of Economics. Wahhaj, Zaki. "An economic model of early marriage." Journal of Economic Behavior & Organization 152

(2018): 147-176.

XI. PROPERTY RIGHTS & CORRUPTION Bac, Mehmet, 1996, “Corruption and supervision costs in hierarchies,” Journal of Comparative Economics, 22(2): 99-118. Besley, Timothy and Andrea Prat, 2006, “Handcuffs for the grabbing hand? Media capture and government accountability,” American Economic Review 96(3): 720-736. Li, David D., 1996, “A theory of ambiguous property rights in transition economies: The case of the Chinese non-state

sector.” Journal of Comparative Economics 23(1): 1-19. Schleifer, Andrei and Robert Vishny, 1994, “Politicians and firms,” Quarterly Journal of Economics 109(4): 995-1025.

XII. URBAN & SPATIAL ECONOMICS

Bergstrom, Ted. 2017. "The Good Samaritan and Traffic on the Road to Jericho." American Economic Journal: Microeconomics, 9 (2): 33-53.

Bernard, Andrew B., Andreas Moxnes, and Yukiko U. Saito. “Production networks, geography and firm performance.” Journal of Political Economy, forthcoming.

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Black, Duncan, and Vernon Henderson, 1999, “A theory of urban growth,” Journal of Political Economy 107(2):252-284. Bond, Philip and Kathleen Hagerty, 2010, “Predicting crime waves,” American Economic Journal – Microeconomics 2(3): 138-

159. Brueckner, Jan, Jacques-Francois Thisse, and Yves Zenou, 1999, “Why is central Paris rich and downtown Detroit

poor? An amenity-based theory,” European Economic Review 43(1): 91-107. Burke, Jeremy, Curtis Taylor, and Liad Wagman, 2012, “Information acquisition in competitive markets: an application

to the US mortgage market,” American Economic Journal: Microeconomics 4(4): 65-106. Calabrese, Stephen, Dennis Epple, and Richard Romano, 2012, “Inefficiencies from metropolitan political and fiscal

decentralization: failures of Tiebout competition,” Review of Economic Studies 79: 1081-1111. Campbell, John and Joao Cocco, 2015, A model of mortgage default, Journal of Finance 70(4).

Courant, Paul, 1978, “Racial prejudice in a search model of the urban housing market,” Journal of Urban Economics 5(3):

329-345. [Becker, reading 01]

Davis, Donald R., and Jonathan I. Dingel. "A spatial knowledge economy." American Economic Review 109.1 (2019): 153-70.

Epple, Dennis, Brett Gordon, and Holger Sieg, 2010, “Drs. Muth and Mills meet Dr. Tiebout,” Journal of Regional Science 50(1): 381-400. He, Chao, Randall Wright, and Yu Zhu, 2015, Housing and liquidity, Review of Economic Dynamics 18.

Head, Allen and Huw Lloyd-Ellis, 2012, “Housing liquidity, mobility, and the labour market,” Review of Economic Studies 79(4): 1559-1590.

Helsley, Robert and William Strange, 1999, “Gated communities and the economic geography of crime,” Journal of Urban

Economics 46(1): 80-105. [] Helsley, Robert and William Strange, 2014, “Coagglomeration, clusters, and the scale and composition of cities,” Journal

of Political Economy 122(5): 1064-1093. Henderson, J. Vernon, 1974, “The sizes and types of cities,” American Economic Review 64(4): 640-656. Henderson, JV and YM Ioannides, 1983, “A model of housing tenure choice,” American Economic Review 73(1): 98-113. Jehiel, Philippe, and Laurent Lamy. "A mechanism design approach to the Tiebout hypothesis." Journal of Political Economy

126.2 (2018): 735-760. Mills, Edwin S., 1967, “An aggregative model of resource allocation in a metropolitan area,” American Economic Review 57(2): 197-210.

Rennhoff, Adam, and Mark Owens, 2012, “Competition and the strategic choices of churches,” American Economic Journal: Microeconomics 4(3): 152-170.

Solow, Robert and William Vickrey, 1971, “Land use in a long narrow city,” Journal of Economic Theory 3(4): 430-447. XIII. INTERNATIONAL ECONOMICS

Azariadis, Costas and Christopher Pissarides, 2007, “Unemployment dynamics with international capital mobility,”

European Economic Review 51: 27-48. [] Broner, Fernando, and Jaume Ventura. "Rethinking the effects of financial globalization." Quarterly Journal of Economics

(2016): qjw010. Celik, Levent, Bilgehan Karabay, and John McLaren, 2015, When is it optimal to delegate? The theory of fast- track

authority, American Economic Journal – Microeconomics 7(3). Chen, Heng, and Wing Suen. "Falling dominoes: A theory of rare events and crisis contagion." American Economic Journal:

Microeconomics 8.1 (2016): 228-255. Coşar, A. Kerem, and Pablo D. Fajgelbaum. "Internal geography, international trade, and regional specialization."

American Economic Journal: Microeconomics 8.1 (2016): 24-56. Elliott, Matthew, Benjamin Golub, and Matthew O. Jackson, 2014, “Financial networks and contagion,” American

Economic Review 104(10): 3115-3153. Espinola-Arredondo, Ana, and Felix Munoz-Garcia. "Free-riding in international environmental agreements: A

signaling approach to non-enforceable treaties." Journal of Theoretical Politics 23, no. 1 (2011): 111-134. Farhi, Emmanuel, and Xavier Gabaix. Rare disasters and exchange rates. Quarterly Journal of Economics 1 (2016): 52. Findlay, Ronald, 1978, “Relative backwardness, direct foreign investment, and the transfer of technology,” Quarterly

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Journal of Economics 92(1): 1-16. Grossman, Gene and Elhanan Helpman, 1994, “Protection for sale,” American Economic Review 84(4): 833-850. Grossman, Gene M., Elhanan Helpman, and Philipp Kircher. "Matching, Sorting, and the Distributional Effects of

International Trade." Journal of Political Economy (2014).

XIV. NATURAL RESOURCE & ENVIRONMENTAL ECONOMICS

Harstad, Bard, 2012: “Climate contracts: a game of emissions, investments, negotiations, and renegotiations,” Review of Economic Studies 79: 1527-1557.

Kamien, Morton, and Nancy Schwartz, 1978, “Optimal exhaustible resource depletion with endogenous technical change,” Review of Economic Studies 45(1): 179-196 Pindyck, Robert S., 1978, “The optimal exploration and production of nonrenewable resources,” Journal of Political Economy 85(5). Solow, Robert, 1974, “Intergenerational equity and exhaustible resources,” Review of Economic Studies 41 (symposium

on the economics of exhaustible resources): 29-45. [] Weitzman, Martin, 1974, “Prices vs. quantities,” Review of Economic Studies 41(4): 477-491. XV. POLITICAL ECONOMY & PUBLIC ECONOMICS

Acemoglu, Daron, 1996, “A microfoundation for social increasing returns in human capital accumulation,” Quarterly Journal of Economics 111(3): 779-804.

Acemoglu, Daron, Georgy Egorov, and Konstantin Sonin, 2013, “A political theory of populism,” Quarterly Journal of Economics.

Acemoglu, Daron, and James Robinson, 2000, “Why did the West extend the franchise? Democracy, inequality, and growth in historical perspective,” Quarterly Journal of Economics 115(4): 1167-1199.

Acemoglu, Daron, and James Robinson, 2008, “The persistence of power, elites, and institutions,” American Economic

Review 98(1): 267-293. [] Acemoglu, Daron and Fabrizio Zilibotti, 1997, “Was Prometheus unbound by chance? Risk, diversification, and

growth,” Journal of Political Economy 105(4): 709-751. Acemoglu, Daron, Georgy Egorov, and Konstantin Sonin. Social Mobility and Stability of Democracy: Re-evaluating De

Tocqueville. No. w22174. National Bureau of Economic Research, 2016. Agranov, Marina. "Flip-Flopping, Primary Visibility, and the Selection of Candidates." American Economic Journal:

Microeconomics 8.2 (2016): 61-85. Ahn, David S., and Santiago Oliveros. "Combinatorial voting." Econometrica 80, no. 1 (2012): 89-141. Akerlof, Robert, and William Holden. Movers and Shakers. Quarterly Journal of Economics (2016) 131 (4): 1849-1874 Ali, S. Nageeb, and David A. Miller. "Ostracism and Forgiveness." American Economic Review. (2016) 106(8):2329-2348. Ales, Laurence, Pricila Maziero, and Pierre Yared, 2014, “A theory of political and economic cycles,” Journal of Economic

Theory 153: 224-251. Alesina, Alberto and Enrico Spolaore, 1997, “The number and size of nations,” Quarterly Journal of Economics 112(4): 1027-1056. Andreoni, James, and Tymofiy Mylovanov, 2012, “Diverging opinions,” American Economic Journal: Microeconomics 4(1):

209-232. Baliga, Sandeep and Jeffrey Ely, Torture and the commitment problem, forthcoming, Review of Economic Studies.

Barberis, Nicholas, Andrei Shleifer, and Robert Vishny, 1998,"A model of investor sentiment." Journal of Financial Economics 49(3): 307-343. Baumol, William and David Bradford, 1970, “Optimal departures from marginal cost pricing,” American Economic Review 60(3): 265-283.

Beath, Andrew, et al. "Electoral rules and political selection: theory and evidence from a field experiment in Afghanistan." Review of Economic Studies (2016): rdw018.

Benabou, Roland, 2013, “Groupthink: collective delusions in organizations and markets,” Review of Economic Studies. Bernheim, B. Douglas and Antonio Rangel, 2009, “Beyond revealed preference: choice-theoretic foundations for

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behavioral welfare economics, Quarterly Journal of Economics 124(1): 51-104. Best, Michael Carlos, Jonas Hjort, and David Szakonyi. "Sources of Variation in State Effectiveness and Consequences

for Policy Design." (2016). Bhattacharya, Sourav, Joyee De, and Tapas Kundu, 2015, Mobility and conflict, American Economic Journal – Microeconomics

7(1). Boleslavsky, Raphael and Christopher Cotton, 2015, Grading standards and educational policy, American Economic Journal

– Microeconomics 7(2). Boleslavsky, Raphael and Christopher Cotton, 2015, Information and extremism in elections, American Economic Journal

– Microeconomics 7(1). Bonatti, Alessandro, and Heikki Rantakari. "The Politics of Compromise." The American Economic Review 106.2 (2016):

229-259. Bordalo, Pedro, Katherine Coffman, Nicola Gennaioli, and Andrei Shleifer. “Stereotypes.”." Quarterly Journal of Economics

(2016) 131 (4): 1753-1794. Dixit, Avinash, 2002, “Incentives and organizations in the public sector,” Journal of Human Resources 37(4): 696-727. Egorov, Georgy, Sergei Guriev, and Konstantin Sonin. "Media freedom in dictatorships." Unpublished paper, Yale

University (2009). Egorov, Georgy, and Konstantin Sonin. "Elections in Non-Democracies." (2017). Fallucchi, Francesco, and Simone Quercia. "Affirmative action and retaliation in experimental contests." Journal of

Economic Behavior & Organization 156 (2018): 23-40. Gregory, Paul, Philipp Schröder, and Konstantin Sonin. “Rational dictators, and the killing of innocents: Data from

Stalin’s archives”, Journal of Comparative Economics, Vol. 39, No. 1, 34-42, March 2011 Guriev, Sergei, and Daniel Treisman. How modern dictators survive: An informational theory of the new authoritarianism. No.

w21136. National Bureau of Economic Research, 2015. Epstein, David, Bahar Leventoglu, and Sharyn O’Halloran, “Minorities and democratization,” Economics & Politics 24(3),

2012. Esteban, Joan and Debraj Ray, 2008, “On the salience of ethnic conflict,” American Economic Review 98(5): 2185-2202. Esteban, Joan and Debraj Ray, 1999, “Conflict and distribution,” Journal of Economic Theory 87: 379-415. Esteban, Joan, Massimo Morelli, and Dominic Rohner, 2015, Strategic mass killings, Journal of Political Economy 123(5). Farhi, Emmanuel, and Xavier Gabaix. Optimal taxation with behavioral agents. No. w21524. National Bureau of Economic

Research, 2015. AER Jan 2020 Fearon, James D., 2011, “Self-enforcing democracy,” Quarterly Journal of Economics 126(4): 1661-1708.

Glaeser, Edward, 2005 “The political economy of hatred,” Quarterly Journal of Economics 120(1): 45-86. Hart, Oliver, Andrei Shleifer, and Robert W. Vishny. "The Proper Scope of Government: Theory and an Application

to Prisons." Quarterly Journal of Economics 112.4 (1997): 1127-1161 Jackson, Matthew and Leeat Yariv, 2015, Collective dynamic choice: the necessity of time inconsistency, American

Economic Journal – Microeconomics 7(4). Krishna, Kala, and Alexander Tarasov. "Affirmative action: One size does not fit all." American Economic Journal:

Microeconomics 8.2 (2016): 215-252. Kuran, Timur, 1989, “Sparks and prairie fires: a theory of unanticipated political revolution,” Public Choice 61(1): 41-74. Kuran, Timur, 1987, “Preference falsification, policy continuity and collective conservatism,” Economic J. 97: 642-665. Leventoğlu, Bahar. "Social mobility, middle class, and political transitions." Journal of Conflict Resolution 58.5 (2014): 825-

864. Nechyba, Thomas, 1997, “Existence of equilibrium and stratification in local and hierarchical Tiebout economies with

property taxes and voting,” Economic Theory 10(2): 277-304. Niskanen, William, 1968, “The peculiar economics of bureaucracy,” American Economic Review 58(2): 293-305.

Oǧuz Afacan, Mustafa, “School Choice with Vouchers,” Journal of Economic Theory 179.1 (2019) Padro i Miquel, Gerard, and Pierre Yared, 2012, “The political economy of indirect control,” Quarterly Journal of Economics

127: 947-1015. Prasada, DV Pahan, and Gautam Bose. "Rational conflict and pre-commitment to peace." Journal of Economic Behavior & Organization 149 (2018): 215-238.

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Rohner, Dominic, Mathias Thoenig, and Fabrizio Zilibotti, 2013, “War signals,” Review of Economic Studies 80(3) Shleifer, Andrei, and Robert W. Vishny. "Corruption." Quarterly Journal of Economics 108.3 (1993): 599-617. Shadmehr, Mehdi, and Dan Bernhardt. "State censorship." American Economic Journal: Microeconomics 7.2 (2015): 280-307. Shen, Ling, 2007, When will a dictator be good? Economic Theory 31. Stahl II, Dale O., and Michael Alexeev. "The influence of black markets on a queue-rationed centrally planned

economy." Journal of Economic Theory 35.2 (1985): 234-250. Straub, Ludwig, and Iván Werning. Positive long run capital taxation: Chamley-Judd revisited. No. w20441. National Bureau of

Economic Research, 2014. AER Jan 2020. Taylor, Curtis and Huseyin Yildirim, 2010, “Public information and electoral bias,” Games & Economic Behavior 68 Tirole, Jean, 2015, Market failures and public policy, American Economic Review 105(6). Weitzman, Martin L., 1979, “Optimal search for the best alternative,” Econometrica 47(3).

XVI. BEHAVIORAL AND NEURO-ECONOMICS

Ahn, David S., and Todd Sarver. "Comparative Measures of Naiveté." Economic Research Initiatives at Duke (ERID) Working Paper 186 (2015).

Akerlof, George and William Dickens, 1982, “The economic consequences of cognitive dissonance,” American Economic Review 72(3): 307-319.

Alonso, Ricardo, Isabelle Brocas, and Juan D. Carrillo, 2014, “Resource allocation in the brain,” Review of Economic Studies 81(2): 501-534.

Banerjee, Abhijit V. "A simple model of herd behavior." Quarterly Journal of Economics (1992): 797-817. Banerjee, Abhijit and Drew Fudenberg, 2004, Word-of-mouth learning, Games & Economic Behavior 46. Battigalli, Pierpaolo, and Martin Dufwenberg. "Guilt in games." American Economic Review 97.2 (2007): 170-176. Battigalli, Pierpaolo, and Martin Dufwenberg. "Dynamic psychological games." Journal of Economic Theory 144.1 (2009):

1-35. Benartzi, Shlomo and Richard Thaler, 1995, “Myopic loss aversion and the equity premium puzzle,” Quarterly Journal of

Economics 110(1): 73-92. [] Benhabib, Jess and Alberto Bisin, 2005, “Modeling internal commitment mechanisms and self-control: a

neuroeconomics approach to consumption-saving decisions,” Games & Economic Behavior 52(2): 460-492. Bloch, Francis, Gabrielle Demange, and Rachel Kranton. "Rumors and social networks." International Economic Review

59.2 (2018): 421-448. Bulte, Erwin, Ruixin Wang, and Xiaobo Zhang. "Forced gifts: The burden of being a friend." Journal of Economic Behavior

& Organization 155 (2018): 79-98. Cason, Timothy and Charles Plott, 2014, Misconceptions and game form recognition: challenges to theories of revealed

preference and framing, Journal of Political Economy 122(6). Chung, Hui-Kuan, Paul Glimcher, and Agnieszka Tymula. "An Experimental Comparison of Risky and Riskless

Choice—Limitations of Prospect Theory and Expected Utility Theory." American Economic Journal: Microeconomics 11.3 (2019): 34-67.

Dillenberger, David, and Philipp Sadowski, 2012, “Ashamed to be selfish,” Theoretical Economics 7: 99-124. Ergin, Haluk and Todd Sarver, 2010, “A unique costly contemplation representation,” Econometrica 78(4): 1285-1339. Fehr, Ernst, and Klaus M. Schmidt, 1999 "A theory of fairness, competition, and cooperation," Quarterly Journal of

Economics 114(3): 817-868. Fehrler, Sebastian, and Niall Hughes. 2018. "How Transparency Kills Information Aggregation: Theory and

Experiment." American Economic Journal: Microeconomics, 10 (1): 181-209. Fudenberg, Drew and David Levine, 2006, A dual-self model of impulse control, American Economic Review 96(5). Kahneman, Daniel and Amos Tversky, 1979, “Prospect theory: an analysis of decision under risk,” Econometrica

47(2): 263-292. [Becker, reading 02]

Karni, Edi, and Marie-Louise Vier, 2013, ""Reverse Bayesianism": a choice-based theory of growing awareness." American Economic Review 103(7): 2790-2810.

Laibson, David, 1997, "Golden eggs and hyperbolic discounting," Quarterly Journal of Economics 112(2): 443-477.

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Leowenstein, George, Ted O’Donoghue, and Matthew Rabin, 2003, “Projection bias in predicting future utility,”

Quarterly Journal of Economics 118(4): 1209-1248. [] Maccheroni, Fabio, Massimo Marinacci, and Aldo Rustichini, 2012, “Social decision theory: choosing within and

between groups,” Review of Economic Studies 79(4): 1591-1636. Machina, Mark, 2014, Ambiguity aversion with three or more outcomes, American Economic Review 104(12). Mailath, George J., and Larry Samuelson. "The Wisdom of a Confused Crowd: Model-Based Inference." (2019). Ok, Efe, Pietro Ortoleva, and Gil Riella, 2015, Revealed (p) reference theory, American Economic Review 105(1). Rabin, Matthew. "Incorporating fairness into game theory and economics," 1993, American Economic Review 83(5): 1281-

1302. Rabin, Matthew, and Dimitri Vayanos. "The gambler's and hot-hand fallacies: Theory and applications." Review of

Economic Studies 77, no. 2 (2010): 730-778. Review of Economic Studies virtual issue on behavioral economics (lots of papers!!) https://academic.oup.com/restud/pages/behavioural_economics Volume 83, Issue 4, 1 October 2016, Dadler, Evan, 2020 (Jan) “Diffusion games” American Economic Review Sarver, Todd, 2008, “Contemplating regret: why fewer options may be better,” Econometrica 76(2): 263-305 Thaler, Richard H. "Behavioral Economics: Past, Present and Future." American Economic Review 106 (7) (2016)

Thaler, Richard H., and Hersh M. Shefrin, 1981, "An economic theory of self-control," Journal of Political Economy 89(2) Thaler, Richard H. "From cashews to nudges: the evolution of behavioral economics." American Economic Review 108.6

(2018): 1265-87.

XVII. OWNERSHIP AND CONTROL Aghion, P., and P. Bolton, 1992, An incomplete contracts approach to financial contracting, Review of Economic Studies

59, 473-494. Goyal, Sanjeev and Adrien Vigier, 2014, “Attack, defense, and contagion in networks,” Review of Economic Studies 81(4):

1518-1542. Grossman Sanford J. and Oliver D. Hart, 1986, The Costs and Benefits of Ownership: A Theory of Vertical and Lateral

Integration, Journal of Political Economy, 94, 691-719 [] Hart, O., and J. Moore, 2008, Contracts as reference points, Quarterly Journal of Economics 123, 1-48. Jensen, Michael C., and William H. Meckling. 1976, Theory of the firm: Managerial behavior, agency costs and

ownership structure. Journal of financial economics 3, 305-360.

XVIII. CONTRACT THEORY Abreu, D., Pearce, D., and Stacchetti, E. 1990. Toward a theory of discounted repeated games with imperfect

monitoring. Econometrica, 58:1041-1063. Glode, V., Green, R. C., and Lowery, R. 2012. Financial expertise as an arms race. Journal of Finance, 67:1723-1759. Grossman, Sanford J., and Joseph E. Stiglitz. "On the impossibility of informationally efficient markets." American

Economic Review 70, no. 3 (1980): 393-408. Holmstrom, B. and Milgrom, P. 1987. Aggregation and linearity in the provision of intertemporal incentives.

Econometrica, 55:303-328. Levin, J. 2003. Relational incentive contracts. American Economic Review, 93:835-857. Opp, Marcus M., and John Y. Zhu. "Impatience versus incentives." Econometrica 83.4 (2015): 1601-1617. Spear, S. and Srivastava, S. 1987. On repeated moral hazard with discounting. Review of Economic Studies, 54:599-617. Thomas, J. and Worrall, T. 1988. Self-enforcing wage contracts. Review of Economic Studies, 61:541-554.

XIX. FINANCIAL INTERMEDIARY, LIQUIDITY, AND FINANCIAL SECURITIES Acharya, V. and S. Viswanathan, 2011, Leverage, Moral Hazard and Liquidity, Journal of Finance, 66, 99-138. Barlevy, Gadi, 2014, A leverage-based model of speculative bubbles, Journal of Economic Theory 153. Biais, B., & Mariotti, T. (2005). Strategic liquidity supply and security design. Review of Economic Studies, 72(3), 615-649.

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Bigio, Saki, 2012, Financial Risk Capacity, Working Paper, Columbia University. Chang, Briana, 2012, Adverse Selection and Liquidity Distortion in Decentralized Markets, Working Paper, University

of Wisconsin-Madison

DeMarzo, Peter, and Darrell Duffie. A liquidity‐based model of security design. Econometrica 67.1 (2003): 65-99 Diamond, D., and P. Dybvig, 1983, Bank runs, deposit insurance, and liquidity, Journal of Political Economy 91, 401-19. Duffie, D., N. Garleanu and L. Pedersen, 2005, Over-the-counter markets, Econometrica 73, 1815-1847. Edmans, Alex, Itay Goldstein, and Wei Jiang. "Feedback effects, asymmetric trading, and the limits to arbitrage." The

American Economic Review 105, no. 12 (2015): 3766-3797. Elul, Ronel and Pietro Gottardi, 2015, Bankruptcy: is it enough to forgive or must we also forget? American Economic

Journal – Microeconomics 7(4). Farhi, E., & Tirole, J. 2012. Bubbly liquidity. Review of Economic Studies, 79(2), 678-706. Garleanu, Nicolae, Stavros Panageas, and Jianfeng Yu, 2015, financial entanglement: a theory of incomplete integration,

leverage, crashes, and contagion, American Economic Review 105(7). Gertler, Mark and Nobuhiro Kiyotaki, 2015, Banking, liquidity, and bank runs in an infinite horizon economy, American

Economic Review 105(7). Gorton, G., and G. Pennacchi, 1990, Financial intermediaries and liquidity creation, Journal of Finance 45, 49-71 Goyal, Sanjeev and Adrien Vigier, 2015, Attack, defense, and contagion in networks, Review of Economic Studies 82(2). Holmstrom, B., and J. Tirole, 1997, Financial intermediation, loanable funds, and the real sector, Quarterly Journal of

Economics 112. Holmstrom, B., and J. Tirole, 1998, Private and public supply of liquidity, Journal of Political Economy 106, 1-40. Morris, Stephen, and Hyun Song Shin, 2012. "Contagious adverse selection." American Economic Journal: Macroeconomics

4(1). Myerson, Roger, 2014, Moral-hazard credit cycles with risk-averse agents, Journal of Economic Theory 153. Townsend, Robert. 1979. Optimal contracts and competitive markets with costly state verification. Journal of Economic

theory 21: 265-293

XX. CAPITAL STRUCTURE Antinolfi, G., F. Carapella, C. Kahn, A. Martin, DC Mills, and E. Nosal, 2015, Repos, fire sales, and bankruptcy policy,

Review of Economic Dynamics 18. Bolton, Patrick, Hui Chen, and Neng Wang. 2011. A Unified Theory of Tobin's q, Corporate Investment, Financing,

and Risk Management. Journal of Finance 66: 1545-1578. Clementi, G. L., and H. Hopenhayn, 2006, A theory of financing constraints and firm dynamics, Quarterly Journal of

Economics 121, 229-265 DeMarzo, P. and Sannikov, Y. 2006. Optimal security design and dynamic capital structure in a continuous-time agency

model. Journal of Finance, 61:2681-2724. DeMarzo, P. and Fishman, M. 2007. Optimal long-term financial contracting. Review of Financial Studies, 20:2079-2128. Fudenberg, Drew and Jean Tirole, 1984, The fat-cat effect, the puppy-dog ploy, and the lean and hungry look, American

Economic Review P&P 74(2). Leland, H., 1994, Corporate debt value, bond covenants, and optimal capital structure, Journal of Finance, 49, 1213-1252 Leland, H. E. and Toft, K. B. 1996. Optimal capital structure, endogenous bankruptcy, and the term structure of credit

spreads. Journal of Finance, 51:987-1019. Modigliani, Franco, and Merton H. Miller. 1958, The cost of capital, corporation finance and the theory of investment.

American Economic Review 48, 261-297. [] Rampini, A. and Viswanathan, S. 2013. Collateral and capital structure. Journal of Financial Economics, 109:466-492.

XXI. MACRO AND INTERNATIONAL FINANCE, BUSINESS CYCLES Acemoglu, Daron, Asuman Ozdaglar, and Alireza Tahbaz-Salehi, 2015, Systemic risk and stability in financial networks,

American Economic Review 105(2). Bernanke, B., and M. Gertler, 1989, Agency costs, net worth, and business fluctuations, American Economic Review, 14-31

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Bloom, N. 2009. The impact of uncertainty shocks. Econometrica, 77:623-685. Buera, Francisco J., Joseph P. Kaboski, and Yongseok Shin. "Finance and development: A tale of two sectors." American

Economic Review 101.5 (2011): 1964-2002. Fajgelbaum, Pablo D., Edouard Schaal, and Mathieu Taschereau-Dumouchel. "Uncertainty traps." The Quarterly Journal

of Economics 132.4 (2017): 1641-1692. He, Zhiguo, and Arvind Krishnamurthy, Intermediary Asset Pricing, 2013. American Economic Review Kehoe, T and D. Levine, 1993, Debt-Constrained Asset, Review of Economic Studies, 60, pp. 865-888 Kurlat, Pablo, 2011. Lemons markets and the transmission of aggregate shocks. Working Paper, Stanford University. Lorenzoni, Guido., 2008, Inefficient credit booms, Review of Economic Studies 75, 809-833 Martin, Ian and Robert Pindyck, 2015, Averting catastrophes: the strange economics of Scylla and Charybdis, American

Economic Review 105(10). Mendoza, Enrique, Vincenzo Quadrini, and Victor Rios-Rull, 2009, Financial Integration, Financial Development and

Global Imbalances, Journal of Political Economy, 117(3)

XXII. NEW PAPERS I WANT TO READ Aoyagi, Masaki. "Bertrand competition under network externalities." Journal of Economic Theory 178 (2018): 517-550. Becker, Joshua, Devon Brackbill, and Damon Centola. "Network dynamics of social influence in the wisdom of

crowds." Proceedings of the National Academy of Sciences (2017): 201615978. Charness, Gary, and Martin Dufwenberg. "Promises and partnership." Econometrica 74.6 (2006): 1579-1601. Collard-Wexler, Allan, Gautam Gowrisankaran, and Robin S. Lee. “Nash-in-Nash” bargaining: a microfoundation for

applied work”. Journal of Political Economy, forthcoming. Cerdeiro, Diego A., Marcin Dziubiński, and Sanjeev Goyal. "Individual security, contagion, and network design." Journal

of Economic Theory 170 (2017): 182-226. Dufwenberg, Martin, and Georg Kirchsteiger. "A theory of sequential reciprocity." Games and Economic Behavior 47.2

(2004): 268-298. Dufwenberg, Martin, Tobias Lindqvist, and Evan Moore. "Bubbles and experience: An experiment." American Economic

Review 95.5 (2005): 1731-1737. Mialon, Sue H., and Seung Han Yoo. "Incentives for discrimination." Journal of Economic Behavior & Organization 136

(2017): 141-160. Makowsky, Michael D., and Siyu Wang. "Embezzlement, whistleblowing, and organizational architecture: An experimental investigation." Journal of Economic Behavior & Organization 147 (2018): 58-75. March, Christoph, and Marco Sahm. "Contests as selection mechanisms: The impact of risk aversion." Journal of Economic Behavior & Organization 150 (2018): 114-131. Meyer-ter-Vehn, Moritz, Lones Smith, and Katalin Bognar. "A Conversational War of Attrition." Review of Economic Studies 85.3 (2018): 1897-1935. Millner, Antony, and Geoffrey Heal. "Time consistency and time invariance in collective intertemporal choice." Journal

of Economic Theory 176 (2018): 158-169. Troya-Martinez, Marta, and Liam Wren-Lewis. "Supervising Relational Contracts." (2018).

XXIII. SUGGESTIONS FROM FELIX FENG, GREGORY PRICE, AND YIFAN TANG Bernheim, B. Douglas, and Michael D. Whinston. "Common agency." Econometrica: (1986): 923-942. Bowles, Samuel, and Herbert Gintis. "The evolution of strong reciprocity: cooperation in heterogeneous populations."

Theoretical population biology 65.1 (2004): 17-28. Coate, Stephen, and Glenn C. Loury. "Will affirmative-action policies eliminate negative stereotypes?." The American

Economic Review (1993): 1220-1240. Duffie, Darrell, Piotr Dworczak, and Haoxiang Zhu. "Benchmarks in search markets." The Journal of Finance 72.5

(2017): 1983-2044. Dworczak, Piotr. "Mechanism design with aftermarkets: Cutoff mechanisms." Available at SSRN 2859206 (2017).

https://cpb-us-e1.wpmucdn.com/sites.northwestern.edu/dist/1/2465/files/2018/07/Impossibility-tql6am.pdf Dworczak, Piotr, and Giorgio Martini. "The simple economics of optimal persuasion." Journal of Political Economy 127.5

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(2019): 1993-2048. Gintis, Herbert. "Strong reciprocity and human sociality." Journal of theoretical biology 206.2 (2000): 169-179. Gintis, Herbert, Eric Alden Smith, and Samuel Bowles. "Costly signaling and cooperation." Journal of theoretical biology

213.1 (2001): 103-119. Gintis, Herbert, Samuel Bowles, Robert Boyd, and Ernst Fehr. "Explaining altruistic behavior in humans." Evolution

and human Behavior 24, no. 3 (2003): 153-172. Kleinberg, Jon, Annie Liang, and Sendhil Mullainathan. "The theory is predictive, but is it complete?: An application

to human perception of randomness." Proceedings of the 2017 ACM Conference on Economics and Computation. ACM, 2017.

Kyle, A.S., 1985. Continuous auctions and insider trading. Econometrica, pp.1315-1335. Liang, Annie, and Xiaosheng Mu. "Complementary Information and Learning Traps." The Quarterly Journal of Economics

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Liu, Qingmin, Konrad Mierendorff, Xianwen Shi, and Weijie Zhong. "Auctions with limited commitment." American Economic Review 109, no. 3 (2019): 876-910.

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From Felix Zhiyu Feng (MAE, PhD Duke) https://foster.uw.edu/faculty-research/directory/felix-zhiyu-feng/ with commentary: Just like almost every modern capital structure model starts with “we build a Leland model (i.e. Leland 1994 or Leland and Toft 1996) with …. (i.e the new twist)", almost every microstructure model starts with “we build a Kyle (1985) model with …” Berk, J.B. and Green, R.C., 2004. Mutual fund flows and performance in rational markets. Journal of political economy, 112(6), pp.1269-1295. If the entire research on mutual fund can be summarized as “finding the fund with the highest return”, then this paper says otherwise, and it is now too widely-known to be ignored in almost all new papers about asset management.

As Charlie mentioned, I have a very specialized focus mainly on contracting theory, information and agency frictions, with applications mainly in finance. Therefore my recommendations of the “good papers” are very subjective in that they are really “papers on which most of my research is based”. I also have a very strong preference for papers with methodological innovations. They tend to have below-the-average citations, even among the theory papers, because

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they could be rather challenging to non-technical readers. Nevertheless a few of my recommendations are of this kind because they are “papers to which I go back whenever I run into a technical problem”. Finally I did my PhD between 2009-2014. Naturally, I am much more familiar with papers around those years. In short, this is my very personal list in addition to Charlie’s (in particular the existing selections of the sections on “ownership and control”, “contracting”, “financial intermediary”, and “capital structure”). They are ranked in chronological order. While the earlier ones have generated higher overall impact, the later ones are probably more useful when conducting research of your own. Myers, S.C. and Majluf, N.S., 1984. Corporate financing and investment decisions when firms have information that

investors do not have. Journal of financial economics, 13(2), pp.187-221. Leland, H.E. and Toft, K.B., 1996. Optimal capital structure, endogenous bankruptcy, and the term structure of credit

spreads. Journal of Finance, 51(3), pp.987-1019.

DeMarzo, P.M. and Sannikov, Y., 2006. Optimal security design and dynamic capital structure in a continuous‐ time agency model. Journal of Finance, 61(6), pp.2681-2724. — methodological (“the paper” on continuous-time dynamic contracting)

He, Z., 2011. A model of dynamic compensation and capital structure. Journal of Financial Economics, 100(2), pp.351-366. — methodological (although the focus of the paper may be on capital structure, nowadays people really cite it for showing the analytical convenience of CARA utility function in a dynamic moral hazard model)

Williams, N., 2011. Persistent private information. Econometrica, 79(4), pp.1233-1275. — methodological (as the title suggests)

Daley, B. and Green, B., 2012. Waiting for News in the Market for Lemons. Econometrica, 80(4), pp.1433-1504. — partly methodological. The two authors published/about to publish four top econ/finance papers using the same technique first introduced in this paper. BTW both of them are Dukies at some point.

I also find sometimes that survey articles are helpful, efficient ways in getting a quick, broad picture of a specific topic. Below are few examples. The last one is about an accounting topic that I came across just recently which, through my own example, demonstrates how one could get a sense of a particular topic within a relatively short time. Harris, M. and Raviv, A., 1991. The theory of capital structure. Journal of Finance, 46(1), pp.297-355. Sannikov, Y., 2013. Dynamic security design and corporate financing. In Handbook of the Economics of Finance (Vol. 2,

pp. 71-122). Elsevier. Edmans, A. and Gabaix, X., 2016. Executive compensation: A modern primer. Journal of Economic literature, 54(4),

pp.1232-87. Göx, R.F. and Schiller, U., 2006. An economic perspective on transfer pricing. Handbooks of Management Accounting

Research, 2, pp.673-695