We seek to determine the causes and magnitudes of network externalities for the automated clearinghouse (ACH) electronic payments system. We construct an equilibrium model of customer and bank adoption of ACH. We structurally estimate the parameters of the model using an indirect inference...

Theorists and policy analysts have convincingly argued that greater trust makes a more efficient society by eliminating costly contracts or expensive reputations. Concurrently, experiments suggest that reciprocity is a potent substitute for law when compliance with contracts is imperfectly...

Hirschman's Exit, Voice, and Loyalty highlights the role of “voice” in disciplining firms for low quality. We develop a formal model of voice as a relational contact between firms and consumers and show that voice is more likely to emerge in concentrated markets. We test this model using...

Using the 2012-13 American Time Use Survey, I find that both who people spend time with and how they spend it affect their happiness, adjusted for numerous demographic and economic variables. Satisfaction among married individuals increases most with additional time spent with spouse. Among...

This paper proposes foundations and a methodology for survey-based tracking of well-being. First, we develop a theory in which utility depends on "fundamental aspects" of well-being, measurable with surveys. Second, drawing from psychologists, philosophers, and economists, we compile a...

This paper proposes a theory of price rigidity consistent with survey evidence that firms stabilize prices out of fairness to their consumers. The theory relies on two psychological assumptions. First, customers care about the fairness of prices: fixing the price of a good, consumers enjoy it...

In the late 1980s and early 1990s, concern over dioxin in both paper products and wastewater led to the development of techniques that reduced the use of chlorine in the pulp industry. Both regulatory and consumer pressure motivated this change. We use patent data to examine the evolution of two...

This paper proposes an explanation of the international home bias in equity based on ambiguity aversion. Doubts imply an additional hedging motif driven by the interaction between real exchange rate risk and ambiguity aversion. What matters is the long-run as opposed to the short-run risk....

Previous research has used survey and diary data to carefully document that Food Stamp recipients decrease their expenditures and consumption of food throughout the benefit month, the beginning of which is defined by the date on which benefits are distributed. The reliance on survey and diary...

We use responses to a survey and experiment with participants in Mexico's privatized social security system to examine how financial literacy impacts workers' choice behavior and how simplifying information on management fees may increase measures of price elasticity sensitivity among the...