In our paper targets, by setting a reserve price, screen acquirers on their (expected) ability to generate merger-specific synergies. Both empirical evidence and many common merger models suggest that the difference between highand low-synergy mergers becomes smaller during booms. This implies that the target’s opportunity cost for sorting out relatively less fitting acquirers increases and, he...

We propose a dynamic model for studying the time evolution of fish stocks in an environment divided into two adjacent zones with different fishing policies. We analyze two particular harvesting methods: constant fishing effort and profit maximization. In this case, some agents engage in competition based on maximization of individual profit whereas others cooperate. The asymptotic behavior of t...

Firms spend billions of dollars each year advertising consumer products in order to influence demand. Much of these outlays are on the creative design of advertising content. Creative content often uses nuances of presentation and framing that have large effects on consumer decision making in laboratory studies. But there is little field evidence on the effect of advertising content as it compa...

In this paper, we use five decades of time-use surveys to document trends in the allocation of time. We find that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked (per working-age adult) between 1965 and 2003. Specifically, we show that leisure for men increased by 6‒8 hours per week (driven by a decline in market work hours) and for women by 4...

We designed and fielded an experimental module in the American Life Panel (ALP) where we ask individuals to report the number of their purchases and the amount paid by debit cards, cash, credit cards, and personal checks. The design of the experiment features several stages of randomization. First, three different groups of sample participants are randomly assigned to an entry month (July, Augu...

We present unitary and sharing rule models of the household that explicitly account for three parental concerns that may lead to gender bias in the allocation of resources to children—equity, efficiency, and preferences. Deaton’s test of the effect of household composition on adult good expenditures is employed using data on fathers’ and mothers’ nutrient intake from the China Health and Nutrit...

Connecting private dwellings to the water main is expensive and typically cannot be publicly financed. We show that households’ willingness to pay for a private connection is high when it can be purchased on credit, not because a connection improves health but because it increases the time available for leisure and reduces interand intra-household conflicts on water matters, leading to sustaine...

Theories of expectations-based reference-dependent preferences have provided a critical modeling innovation, incorporating a structured theory of the formation of reference points. An important prediction of thesemodels is a monotone response in behavior to changes in expectations. To test such models we conduct a real-effort experiment manipulating expectations and examining consequences on ef...

Using data from a unique pricing experiment, we investigate Vickrey’s conjecture that responsive pricing can be used to smooth both predictable and unpredictable demand shocks. Our evidence shows that increasing the responsiveness of price to demand conditions reduces the magnitude of deviations in capacity utilization rates from a pre-determined target level. A 10 percent increase in price var...

The economics of happiness is applied to further the understanding of important consumption decisions in which limited willpower is often argued to lead to suboptimal choices. Based on individuals’ judgments of the quality of their lives, it is, in principle, possible to derive whether some observed behavior is suboptimal and is therefore reducing a person’s welfare. We discuss the key characte...