the replacement problem abstract a prototypical vintage capital model of economic growth is developed where the decision to replace old technologies with new ones is modeled explicitly technological change is investment specific depreciation in this environment is an economic not a physical concept the vintage capital economy s balanced growth paths and transitional dynamics are analyzed the transitional dynamics are markedly different from the standard neoclassical growth model

tying and innovation a dynamic analysis of tying arrangements this paper analyses the effects of tying arrangements on r d incentives it shows that tying is a means through which a firm can commit to more aggressive r d investment in the tied goods market tying also has the strategic effect of reducing rivals incentives to invest in r d the strategy of tying is a profitable one if the gains via an increased share of dynamic rents in the tied goods market exceed the losses that result from intensified price competition in the market the welfare implications of tying and consequently the appropriate antitrust policy are discussed

equilibria in unidirectional spatial models abstract this paper a characterizes the unique nash equilibrium of the unidirectional hotelling downs game in which firms maximize their market shares for any distribution of the consumers and b analyzes equilibrium behavior in the variation of the game in which each firm aims to secure a larger market share than its competitor in the first case firms employ identical mixed strategies and each of them serves in expected terms a fraction 1 e of the market and in both cases no firm ever locates in a position to the left of the first quartile of the consumers distribution

natural groups and economic characteristics as driving forces of wage discrimination we investigate whether the origin of an employee provides different motives for wage discrimination in gift exchange experiments with students and migrant workers in china in a lab and an internet experiment subjects in the role of employers can condition their wages on the employees home provinces the resulting systematic differences in wages can be linked to natural groups and economic characteristics of the provinces in group favoritism increases wages for employees who share the same origin as the employer while an increased probability of being matched with an employee with a different ethnicity reduces wages furthermore wages in the laboratory increase with the actual wage level in the employees home province nevertheless employees effort is not influenced by these variables only the wage paid in the experiment influences effort

religious pluralism and religious participation a game theoretic analysis1 does religious pluralism decrease religious participation or increase it secularization theorists claim the former while religious economies proponents claim the latter and each side has used estimated pluralism participation correlations to support its argument using a formal game theoretic model this article shows how religious market forces and regulations generate plausible pluralism participation correlations whether or not the direct causal mechanisms argued by either side of the debate exist the model generates testable hypotheses concerning the pluralism participation relationship at both local and national levels and yields insights into previous empirical work

sacrifice and stigma reducing free riding in cults communes and other collectives this paper presents an economic analysis of religious behavior that accounts for the continuing success of groups with strange requirements and seemingly inefficient prohibitions the analysis does not presuppose any special motives for religious activity rather religion is modeled as a club good that displays positive returns to participatory crowding the analysis demonstrates that efficient religions with perfectly rational members may benefit from stigma self sacrifice and bizarre behavioral restrictions the model also addresses sacrifice in nonreligious social clubs fraternities communes political parties work groups and families

copyright protection standards and authors time allocation for centuries it was necessary for performers to be present in real time to supply their services such as music dance or drama labor time and human skill and capital were inextricably related reproducibility the ability to make copies of human services that are adequate substitutes for live performance has meant performers need not be present to supply their services which can be recorded and supplied with economies of scale consumers do not need the live performer to be present to obtain their services demand for performers has therefore fallen the same is of course true for non performing authors such a scenario must have altered the balance of incentives for authors for how they ultimately decide to spend their time the choices between working on producing copyrighted material which will earn them income through royalties over the duration of the copyright working for spot wages either in related or in unrelated activities and to take leisure must be closely related to the ability of copyright law to guarantee future income from copyrights this article considers this situation in terms of a formal model of time allocation copyright 2006 oxford university press

technological change and retirement decisions of older workers according to human capital theory technological change will influence the retirement decisions of older workers in two ways first workers in industries with high rates of technological change will retire later if there is a net positive correlation between technological change and on the job training second an unexpected change in the rate of technological change will induce older workers to retire sooner because the required amount of retraining will be an unattractive investment we matched industry data on productivity growth and occupational data on required training with data from the national longitudinal surveys of older men to test these hypotheses our results support both hypotheses

the economics of rising stars this paper analyzes an occupation in which there is substantial uncertainty about individual performance and past performance is correlated with future outcomes in equilibrium only the young enter the occupation and only the successful stay on the young are numerous and earn incomes well below what their current alternative o ffers success is rare and rewarded highly the implied distribution of earnings must have positive skewness copyright 1988 by american economic association

religious participation and children s education a social capital approach abstract based on the argument in both economic and sociological literature that religion is conducive to children s human capital formation this paper provides a model of religious participation and explores a mechanism that social capital affects children s education a la coleman coleman j s 1988 social capital in the creation of human capital american journal of sociology 94 s95 s120 the model generates several interesting implications which help explain some important stylized facts about education and religion further in a dynamic setting the model shows that there exists a steady state in which individuals allocate a positive amount of time and resources to religious activities thus it complements the existing literature to explain why seemingly unproductive religions can be everlasting

sequential location when transportation costs are asymmetric abstract in this paper i study sequential location by three firms when it is more costly for a consumer to move in one direction say to the left than to move to the right i provide a limit result for the ease when the difference between left and right transportation costs approaches zero this result resolves an equilibrium selection problem in the case of symmetric transportation costs i also discuss the entry pattern and the presence of a first mover advantage in the asymmetry case

the economics of has beens the evolution of technology causes human capital to become obsolete we study this phenomenon in an overlapping generations setting assuming that technology evolves stochastically and that older workers find updating uneconomic experience and learning by doing may offer the old some income protection but technology advance always turns them into has beens to some degree we focus on the determinants demand elasticities persistence of technology change etc of the severity of the has beens effect it can be large even leading to negatively sloped within occupation age earnings profiles and an occupation dominated by a few young high income workers architecture displays the sort of features the theory identifies as magnifying the has beens effect and both anecdotes and some data suggest that the has beens effect in architecture is extreme indeed

sources procedures and microeconomic effects of innovation fabio arcangeli paul david frank engelman christopher freeman massimo moggi richard nelson luigi orsenigo nathan rosenberg michele salvati g n von tunzelman two anonymous referees and the participants at the meeting of the committee on distribution growth and technical progress of the italian national research council cnr rome november 16 1985 have helped with various redraftings a particularly grateful acknowledgment is for the insightful and patient help of moses abramovitz this work has been undertaken at the science policy research unit spru university of sussex as part of the research program of the designated research centre sponsored by the economic and social research council esrc earlier support to the research that led to this paper by the italian national research council cnr is also gratefully acknowledged the statistical research has been undertaken with the assistance of stephano brioschi ilaria fornari and giovannu prennushi

technology adoption learning by doing and economic growth abstract we develop a model in which firms choose which technologies to adopt as well as the timing of such adoptions in between adoptions a firm accumulates expertise in its technology which allows it to operate the technology more efficiently thus there is firm specific learning by doing for certain parameterizations of the model and appropriate initial distributions of technologies and expertise equilibria are characterized by positive and constant growth of per capita output and positive but nonconstant growth of each firm s output we find firms adoption decisions and output growth depend upon the efficiency of capital markets journal of economic literature classification numbers o41 o33

race and gender discrimination in bargaining for a new car more than three hundred paired audits at new car dealerships reveal that dealers quoted significantly lower prices to white males than to black or female test buyers using identical scripted bargaining strategies ancillary evidence suggests that the dealerships disparate treatment of women and blacks may be caused by dealers statistical inferences about consumers reservation prices but the data do not strongly support any single theory of discrimination copyright 1995 by american economic association

the price of redemption sin penance and marginal deterrence abstract the threat of loss of the afterlife as punishment for sin is a fundamental tenet of nearly all religious traditions most religions also contain a notion of redemption or forgiveness of sin but they differ as to whether or not redemption requires atonement or penance the possibility of redemption allows sinners to be rehabilitated but in so doing potentially undermines the incentive for them to refrain from sin in the first place we show that a properly calibrated form of penance as the price of redemption can both deter people from committing early sins and provide an incentive for those who have previously sinned to refrain from committing further sins in other words it achieves marginal deterrence such a system requires strong belief in the afterlife when belief is moderate we show that a regime of free redemption may be optimal we conclude by examining the implications of the analysis for after death redemption the catholic church s practice of selling redemption indulgences and the protestant doctrine of predestination which was in part a reaction to the church s commodification of redemption

anonymous job applications of fresh ph d economists abstract this paper analyzes anonymous job applications of ph d economists in the academic job market we use data on interview invitations from a randomized experiment at a european based research institution results show that the underrepresented gender was hurt by anonymous applications

managerial objectives the r rating puzzle and the production of violent films we analyze project choice in the motion picture industry and find evidence consistent with revenue maximization and excessive hedging we find that movies that are very violent or feature sex and violence do not provide excess returns but they increase revenues particularly in the international market further they tend to lose money less often and their returns are more predictable even though there are never mega hits this evidence is consistent with studies of other industries and it partially explains the r rating puzzle that is the preponderance of r rated films although most studies find that g and pg rated films perform better

a meta analysis of the international gender wage gap abstract since the early 1970s a number of authors have calculated gender wage differentials between women and men of equal productivity this meta study provides a new quantitative review of this vast amount of empirical literature on gender wage differentials as it concerns not only differences in methodology data and time periods but also different countries we place particular emphasis on a proper consideration of the quality of the underlying study which is done by a weighting with quality indicators the results show that data restrictions i e the limitation of the analysis to new entrants never marrieds or one narrow occupation only have the biggest impact on the resulting gender wage gap moreover we are able to show what effect a misspecification of the underlying wage equation like the frequent use of potential experience has on the calculated gender wage gap over time raw wage differentials worldwide have fallen substantially however most of this decrease is due to better labor market endowments of females

market segmentation and non uniform shariah standards in islamic finance abstract this paper proposes a new answer to a controversial paradox in islamic finance described by el gamal 2002 despite the long development of uniform standards for islamic finance the market remains largely segmented we explain market segmentation as a separating equilibrium in which finance premiums serve as a socially beneficial although costly signaling mechanism market segmentation under a uniform standard of shariah compliance occurs when the shariah boards of two islamic finance institutions ifis use different degrees of stringency even though they agree on a common set of minimum requirements to comply with shariah law heterogeneous degrees of stringency chosen by different ifi shariah boards translate into different premiums paid by different customers one ifi targets the moderately pious consumer segment while the other targets the highly pious segment the ifi that targets highly pious consumers voluntarily offers a more limited set of investments and financing products by allowing for multiple muslim communities with distinct group identities and correspondingly variable willingness to pay to signal piety types the model provides an explanation for market segmentation

printing and protestants an empirical test of the role of printing in the reformation the causes of the protestant reformation have long been debated this paper seeks to revive and econometrically test the theory that the spread of the reformation is linked to the spread of the printing press i test this theory by analyzing data on the spread of the press and the reformation at the city level an econometric analysis that instruments for omitted variable bias with a city s distance from mainz the birthplace of printing suggests that cities with at least one printing press by 1500 were at minimum 29 percentage points more likely to be protestant by 1600

adopting a new religion the case of protestantism in 16th century germany using a dataset of territories and cities of the holy roman empire in the sixteenth century this article investigates the determinants of adoption and diffusion of protestantism as a state religion a territory s distance to wittenberg the city where martin luther taught is a major determinant of adoption this finding is consistent with a theory of strategic neighbourhood interactions introducing the reformation was a risky enterprise for territorial lords and had higher prospects of success if powerful neighbouring states committed to the new faith the actual spatial and temporal patterns of expansion of protestantism are analysed in a panel dataset

the importance of brand and competition in defining u s religious markets author affiliation brian goff department of economics 1906 college heights boulevard western kentucky university bowling green ky 42101 usa brian goff wku edu corresponding authormichelle w trawick dagger department of economics 1906 college heights boulevard western kentucky university bowling green ky 42101 usa michelle trawick wku edu acknowledgment the authors thank bob tollison colleagues participating in the economics workshop at wku and two anonymous reviewers for comments any remaining flaws are the authors responsibility 1 introductionover the past 40 years economists have vastly expanded their study of behavior in markets where there is no explicit trade of goods or services one of the most fundamental and ubiquitous of these markets is that of religious behavior where economists and other social scientists have explored a variety of influences on religious participation at the outset of this research program economic models of religious choice borrowed from long used choice theoretic concepts such as the law of demand or the cost of time more recent contributions have included household production models taking account of human capital or the role of market level forces particularly religious competition prior empirical research has resulted in the identification of a variety of determinants of religious participation these include income education race and the degree of monopolization or competitiveness in the religious market as the empirical application and testing of these models has proceeded researchers have been aware of problems in measuring various aspects of religious choice such as religious participation or religiosity at the most general level religiosity may imply a difference in a secular versus religious worldview at the level of actual observation it often measures how frequently one attends church while some of the basic measurement issues related to religious choice and behavior may be beyond the power of researchers to investigate one important aspect is not but has largely been overlooked that is the type or brand of religious choice by and large empirical research has skirted this important definitional issue and treated different types or brands of religious choice much like one would treat different brands of carbonated soft drinks using such a broad homogeneous definition of the religious product implicitly assumes that economic and demographic characteristics exert similar influences on different types or brands of religious participation and thereby assumes that such branding is not of empirical significance in defining religious markets and behavior within them 1 moreover some tension has existed in prior empirical work as to whether religious competition is an exogenous factor the common assumption or whether it helps to define the choice variable 2our central question is whether the same processes are driving religiosity across brands we ask do consumers of religion respond differently to key economic variables such as income religious competition or other factors based on the brand of religion being consumed likewise do some economic variables exert their influence independently of brand an important part of our investigation centers on how to measure brand we first rely on two indicators of brand broad denominational categories and intensity of participation in religious activity the denominational categories are mainline protestant evangelical protestant and catholic the intensity breakdown is based on geographic regions of low moderate and high religious participation in addition we also examine whether the degree of religious competition itself helps to define brand in the next section we develop theoretical explanations for variation in overall religious participation as well as by brand and discuss prior empirical work in this area

an economic analysis of the protestant reformation this paper seeks to explain the initial successes and failures of protestantism on economic grounds it argues that the medieval roman catholic church through doctrinal manipulation the exclusion of rivals and various forms of price discrimination ultimately placed members seeking the z good spiritual services on the margin of defection these monopolistic practices encouraged entry by rival firms some of which were aligned with civil governments the paper hypothesizes that protestant entry was facilitated in emergent entrepreneurial societies characterized by the decline of feudalism and relatively unstable distribution of wealth and repressed in more homogeneous rent seeking societies that were mostly dissipating rather than creating wealth in these societies the roman church was more able to continue the practice of price discrimination informal tests of this proposition are conducted by considering primogeniture and urban growth as proxies for wealth stability

an economic theory of economic analysis the case of the school of salamanca the school of salamanca often is identified as the first economic tradition in the history of the dismal science its members anticipated principles later developed by the likes of adam smith and carl menger this paper provides an economic theory of the production of economic analysis by the doctors of salamanca beginning from the observation that producers of economic analysis respond to incentives the same way producers of meat beer or bread do historically the demand for economic analysis arises from two sources governments and interest groups i argue that the changes in international trade associated with the emergence of new transatlantic markets in the sixteenth century led to an increase in the demand for economic analysis by spanish merchants and that the contribution of the school of salamanca was grounded in the predictable supply response to those fresh incentives

downstream r d raising rivals costs and input price contracts we analyze the incentives for cost reducing r d by downstream firms in a two tier market structure by increasing the demand for an input downstream r d allows the upstream firm to raise its input price this lowers the benefit of r d to a downstream firm but raises its rivals costs as a result a downstream oligopolist may invest more in r d than a downstream monopolist a phenomenon that is absent in a purely horizontal r d setting fixed price agreements where the input price remains unchanged following downstream r d promote innovation by eliminating the opportunistic behavior of the input supplier and are welfare enhancing

risk rationality and religious portfolios i introduction this paper builds on two assumptions the first self evident the second more controversial together they yield a provocative theory of religious behavior and organization the first assumption is that religion involves a great deal of risk those who engage in religious acts cannot know that their efforts will have the desired effects religious acts thus have the character of risky investments exacting resource costs in return for uncertain rewards the second assumption is that people choose their religious behavior rationally weighing the costs and benefits of religious behavior and seeking to limit the risk associated with religious choices churches and other religious firms employ a variety of institutional arrangements that mitigate religious risk most arrangements follow one of two major risk management strategies which in turn give rise to two different styles of religion one centers on collective production the other on private production and diversified consumption collective religion is congregationally oriented and tends to employ exclusivity and costly prohibitions to limit free riding and maintain high levels of commitment private religion is less susceptible to free rider problems but also less capable of generating commitment private religion tends to center on client practitioner relationships or fee for service transactions and consumers tend not to form exclusive attachments to a single religious firm outright payments for goods and services overshadow costly demands for an austere deviant or sacrificial life style a large body of descriptive historic and anecdotal evidence confirms these predictions and illustrates their range of application the concluding sections of the paper apply the proposed theory to a series of contrasts asian versus western religion mainstream churches versus exclusive sects new age versus standard american religion and greco roman paganism versus judeo christian monotheism ii religious commodities and the problem of risk economic models of religious behavior typically begin by assuming that individuals allocate their time and money so as to maximize their utility from religious commodities r and all other secular commodities s the production of religious commodities depends on personal inputs of time and money but may also depend on past experience religious human capital styles of behavior such as diet dress and sexual practices and the time and money inputs of others such as fellow church members see azzi and ehrenberg 1975 sullivan 1985 and iannaccone 1992 for formal analyses and empirical tests with the exception of durkin and greeley 1991 and montgomery 1992 previous models take belief as given thereby sidestepping the issue of risk but religious commodities do involve risk sermons and scriptures do emphasize the need for faith and people do wrestle with and often yield to doubt insights from secular markets and the economics of uncertainty explain a broad range of behaviors and institutions that arise in response to religious risk in particular they highlight two different risk reducing strategies one of which centers on exclusivity and collective production the other centers on diversification and private production managing risk through collective action religious congregations the would be believer faces a situation not unlike the would be used car buyer used cars are classic experience goods nelson 1970 since potential buyers are hard pressed to determine car quality in advance of purchase sellers thus have an incentive to overstate the value of their merchandise and to disguise its true nature used car buyers in turn are aware of the sellers incentive to misrepresent their products and so will attempt to increase their stock of information and or reduce their risk in many ways they may demand guarantees seek information from third parties investigate the seller s reputation and so forth

copyright and artists a view from cultural economics most of the standard economic literature on copyright ignores a number of aspects that have considerable significance for cultural production and for artists the primary creators of copyright works the supply of which copyright is supposed to stimulate specifically there is little mention in that literature of moral rights no distinction is made between copyright for authors and neighbouring rights for performers the distributional effects of copyright are barely referred to and the question of how much artists earn from copyright is ignored in this article i survey work that relates copyright and cultural economics showing that cultural economics offers another view to the standard economics of copyright moreover the case for government intervention in the arts and heritage made by cultural economists has resonance for the economic rationale of copyright

an economic theory of church strictness this paper introduces spatial location models into the economics of religion we offer a new explanation for the observed tendency of state monopoly churches to locate toward the low tension end of the strictness continuum obtained through the conjunction of benevolent preferences denominations care about the aggregate utility of members and asymmetric costs of going to a more or less strict church than one prefers we derive implications regarding the relationship between religious strictness and membership religious market interactions and asymmetric costs of membership highlight new explanations for some well established stylised facts opening the way to new empirical comparisons with more traditional explanations

is there gender discrimination in named professorships an econometric analysis of economics departments in the us south this study examines the correlates of the probability that an individual academician holds a named professorship named professorships like other positions within an organization are determined by a mixture of market and non market forces thus both merit both past and expected future productivity and discrimination may play a role regression results and blinder oaxaca decomposition tests presented here support a conclusion of gender discrimination in the named professorship process at american institutions of higher education specifically it is found that gender discrimination results in a 7 6 percentage point disadvantage for females relative to males regarding the likelihood of holding a named professorship in economics

are emily and greg more employable than lakisha and jamal a field experiment on labor market discrimination we study race in the labor market by sending fictitious resumes to help wanted ads in boston and chicago newspapers to manipulate perceived race resumes are randomly assigned african american or white sounding names white names receive 50 percent more callbacks for interviews callbacks are also more responsive to resume quality for white names than for african american ones the racial gap is uniform across occupation industry and employer size we also find little evidence that employers are inferring social class from the names differential treatment by race still appears to still be prominent in the u s labor market jel j71 j64

superstars and mediocrities a solution based on personal income taxation abstract the markets for talent often produce large income inequality and therefore raise political attention while such inequality can be due to superstar dynamics or factor complementarities tervio superstars and mediocrities market failure in the discovery of talent the review of economic studies 2009 first proposed a market failure that was previously unknown to the literature pointing to long term contracts as a solution i extend the model in tervio 2009 to include personal income tax policy reforms and demonstrate that tax design can be employed as a solution to the market failure when long term contracts are unfeasible with reasonably small enough entry payments that novice workers would sustain to compensate employers for the possibility to be discovered as high talent types both a progressive tax and a tax incentive on entry wages are found effective the tax incentive on entry wages though can be used even with very large deductible entry payments and with overall negative net entry wages

baseball specific human capital why good but not great players are more likely to coach in the major leagues the career choice of retiring athletes provides an interesting example of a midcareer transition conditioned on specific human capital previous research examines the determination of earnings in professional sports 3 5 14 but does not consider how skills developed during an athlete s playing years affect subsequent opportunities in this paper i test the hypothesis that skills specific to baseball increase the probability a player will choose to coach the empirical work confirms the importance of baseball specific human capital in the decision to coach and provides some of the first formal evidence that the opportunities of star players differ distinctly from players that are marginally less talented in the theoretical section i develop a random utility model in which a retiring player chooses between coaching and non coaching careers on the basis of potential earnings and a random taste component earnings in either career are determined by a vector of career attributes that embody the player s productivity in each if the random taste component is normally distributed the probability a player chooses a coaching career can be estimated using probit the empirical results support the predictions of the model that baseball specific human capital is positively correlated with the probability of a player coaching and that star players are unlikely to coach because their marginal skill advantage is not baseball specific in particular the findings imply that players with long but unexceptional careers are more likely to coach in the major leagues an extension of the empirical model is applied to the issue of discrimination the insignificance of a black dummy variable suggests that black players have the same probability of coaching as comparably skilled white players however a more complex interactive specification suggests that relatively poor opportunities for black stars outside the game leads to their crowding out those black players who if they were white would most likely coach

the importance of bundling in a gorman lancaster model of earnings the idea that the labor market of individuals can be decomposed into payments to separate productive attributes has an enduring appeal in economics assuming that demographic groups differ only in their endowments of productive characteristics it is possible to rationalize observed demographic earnings differentials without invoking the arguments that characteristics specific to a particular demographic group are direct objects of employer demand by aggregating skills over all demographic groups it is possible to produce a theory of the market determination of the prices of skills held in different amounts by different demographic groups this paper considers conditions under which characteristics are uniformly priced across sectors of a multisector economy the paper presents empirical evidence that rejects uniform pricing of characteristics as a description of the us labor market bundling may account for this evudence but other hypotheses do as well authors

antitrust and regulation essays in memory of john j mcgowan this collection of original essays by economists and lawyers addresses important aspects of antitrust and regulation such as the u s government s merger guidelines antitrust in regulated industries the connection between profitability and market share and the question of what constitutes anticompetitive behavior the book combines economic and legal analysis to inform policymaking with theory as well as the lessons of experience in the petroleum electric power computer retail food and telecommunications industries antitrust and regulation opens with john mcgowan s previously unpublished background paper mergers for power or progress for the merger guidelines taskforce which recommended the rules adopted by the antitrust division of the justice department in 1982 this is followed by competition and antitrust in the petroleum industry an application of the merger guidelines by george a hay and robert j reynolds anticompetitive mergers prevention and cure by william j kolasky jr philip a proger and roy t englert jr industrial markets another look at the sic approach by james w mckie profitability and market share by morris a adelman and bruce e stangle non price anticompetitive behavior by dominant firms toward the producers of complementary products by j a ordover a o sykes and r d willig market conduct when is it anticompetitive by robin c landis and ronald s rolfe can exclusive franchises be bad by f m fisher mixing regulatory and antitrust policies in the electric power industry the price squeeze and retail market competition by paul l joskow preferences of policy makers for alternative allocations of the broadcast spectrum by forrest nelson and roger noll the financial interest and syndication rules in network television regulatory fantasy and reality by f m fisher and borrowing from peter to pay paul more on departures of price from marginal cost by almarin phillips and gary l roberts

dynamic models of religious conformity and conversion theory and calibrations abstract this paper develops overlapping generations models to explain and simulate changes in the proportion of secular and religious people the church is modeled as generating an externality associated with conformity enhancing education observed changes in the number of nonbelievers are explained by different birth rates among secular and religious parents and the relative proportion of young nonconformists calibrations for the conformity rates among secular and religious people show that the observed long run increase in the difference between percentage of secular people in europe and the united states can be attributed to lower conformity rates prevailing in europe

emergent extremism in a multi agent model of religious clubs i introduction religious extremism is as old as religion itself but the tendency to promote militancy and terrorism from within extremist religions appears to be much more common now than in times past juergensmeyer 2001 stern 2003 wiktorowicz 2005 1 today s terrorists routinely frame their objectives in religious terms and organize their activities within religious movements this shift is not due to increased militancy within religion as a whole not even within the stricter subset of religious groups commonly labeled sectarian or fundamentalist bromley and melton 2002 marty and appleby 1995 rather groups with militant objectives are increasingly leveraging the latent potential for violence within extremist religion krueger and maleckova 2003 and krueger 2007 have shown that contrary to popular hypotheses regarding the salience of poverty and education it is instead institutional conditions such as civil liberties that contribute to the origination of terrorists within a country religious extremism has been shown to be a potentially powerful input into the production of terrorism berman 2004 2 and the origination of terrorists has been empirically connected to civil liberties we seek to complete the triangle and connect religious extremism to social conditions in an extension of existing theory and test the predictions of the model in an empirical context with an eye toward civil liberties this paper extends previous models of religious clubs to better account for observed patterns of extremism across different settings and test policies most likely to reduce the appeal of extremism economists at first blush should have trouble explaining the survival of groups that demand large sacrifices from their members successful religious groups however routinely impose all sorts of apparently unproductive costs on their members iannaccone 1992 introduced a formal model of religious clubs within which apparently irrational sacrifice and stigma enhances the individual and collective utility his model demonstrated the feasibility of extremist groups but does less to explain the relative prevalence of extremism across time and place further the original model allows for only corner solutions and as such the viability of extreme groups is indistinguishable from the viability of the more moderate groups they must compete with for members in the religious marketplace in section ii we revisit analyze and extend the club model of religion we push the analysis of the original model exploring sacrifice substitutability of club and private goods and their relationships to member commitment and the viability of extremist groups in this preliminary analysis we illustrate not only the potential insights of the club theory of religion into the strength and viability of extremist groups but also the limitations inherent to the representative agent model we proceed by extending the model in a multi agent ma computational framework this framework permits us to analyze the distributions of agents and clubs that make up a religious economy the computational nature of the model is critical because it allows for sufficient heterogeneity of agents and clubs and given this heterogeneity agent decision making absent closed form solutions via nash equilibria extremists groups emerge as just one segment the high cost tail of a distribution of religious clubs that range across the full spectrum of potential group imposed sacrifice and stigma extremism is identifiable and comparable in the model because it exists within a full spectrum of clubs by varying the parameters of the model that control the distribution of secular wages across agents and the degree of substitutability between religious and secular commodities we can better explain where and when religious extremism is most popular its strength relative to more moderate groups and which economic policies reduce its prevalence

the economic effects of the protestant reformation testing the weber hypothesis in the german lands following max weber many theories have hypothesized that protestantism should have favored economic development with its religious heterogeneity the holy roman empire presents an ideal testing ground for this hypothesis using population figures of 272 cities in the years 1300 1900 i find no effects of protestantism on economic growth the finding is precisely estimated robust to the inclusion of various controls and does not depend on data selection or small sample size denominational differences in fertility behavior and literacy are unlikely to be major confounding factors protestantism has no effect when interacted with other likely determinants of economic development instrumental variables estimates considering the potential endogeneity of religious choice are similar to the ols results

mobility and modality trends in us state personal income we examine the mobility and modality trends in us state per capita personal income and its components during the 1929 1999 period we find strong evidence of convergence for states but that the tendency towards convergence and the associated mobility within the distribution varies during the period and especially for the 1980s our analysis of convergence by income component suggests that transfer income contributes more to the observed convergence than does asset income we also note that distributional mobility need not be accompanied by high rank mobility and find that trends toward convergence in the us have tended to preserve rank ordering cet article cherche a examiner les tendances de mobilite et de modalitequant aux revenus personnels par tete et a ses composants aux etats unis pendant la periode qui va de 1929 a1999 il s avere de fortes preuves d une convergence entre etats qui varie au cours de la periode etudiee et qui va de pair avec une variation de la mobilite associee au sein de

the invisible hand plays dice multiple equilibria in sects markets religious participation is much more widespread in the united states than in europe while europeans tend to view sects more suspiciously than americans we propose an explanation for these patterns without assuming differences in preferences or market fundamentals we study a religious market where both demand and supply of spiritual services are endogenous such markets may have multiple equilibria further equilibria with more sects result in higher welfare and lower membership costs as secular societies tend to host on average more demanding sects

talent and publicity as determinants of superstar incomes empirical evidence from the motion picture industry by drawing on the two prevailing economic stardom theories the paper investigates the sources of superstardom in the us movie industry for the econometric analysis we use income and popularity d

the economics of the counter reformation incumbent firm reaction to market entry the catholic church reacted to the protestant reformation by taking on the defensive posture of an incumbent firm monopoly fighting to survive in the face of new competition contemporary firms typically respond to rival entry by rewriting their corporate charter so did the medieval catholic church but the council of trent failed as a reorganization plan because to keep economic rents flowing as before it left intact the distribution of powers and property rights among the governing body of pope and cardinals thus demonstrating that entrenched economic interests are powerful inducements to behavior even in spiritual institutions jel n00 d2 d4 d72 p16 it is to be desired that those who assume the episcopal office know what are their duties and understand that they have been called not for their own convenience not for riches or luxury but to labors and cares for the glory of god the canons and decrees of the council of trent session 25 chapter 1 church reform usually meant tightening up the rules for collecting money denys hay 1977 39 i introduction although it has not been universally applauded the extension of economics into new domains of social behavior has become increasingly common economic tools have now been applied to areas of human behavior as diverse as art culture marriage and sumo wrestling for some economists one of the most intriguing of these new realms of inquiry is the economics of religion a subject that relies on principles of rational behavior interest group analysis public choice and game theory to explain church membership as well as changes in religious institutions azzi and ehrenberg 1975 advanced one of the earliest studies in this vein more recently iannaccone 1998 enriched and continued the tradition our own previous contributions to this burgeoning body of literature have focused on the economics of the medieval church in earlier studies ekelund et al 1989 1992 treated the medieval church as an economic firm to better understand the formation of religious doctrine ekelund et al 1996 analyzed the industrial organization and rent seeking practices of the medieval church and ekelund et al 2002 explored the economics of the protestant reformation from a historical perspective the landmark change in religious institutions was the protestant reformation of the sixteenth century which eventually produced permanent changes in religious markets in a previous study ekelund and colleagues 2002 analyzed this event as a form of market entry and showed that the protestant reformation 1517 1555 was a consequence of both demand side and supply side factors this article takes the next logical step it seeks to analyze the historical response to competitive entry of an incumbent finn the medieval catholic church by explicit reference to what historians and scholars refer to as the counter reformation or alternatively the catholic reformation 1555 1648 1 we maintain that as a dominant firm the roman catholic church responded to market entry in a way predicted by economic theory after protestantism gained a foothold in the religious market the catholic church faced a residual demand curve that was composed of less elastic demanders consequently it a lowered the average price of providing the z good religious services b engaged in vigorous competition in the neighborhood of the new entrant s price c attempted to raise rivals marginal costs to move demanders back to catholicism and d tried to boost demand in its retail market while simultaneously protecting and even intensifying its rent seeking practices in its wholesale market 2 in sum the roman catholic church responded to protestant entry and to the encroaching age of reason with violence and nominal rather than fundamental doctrinal alterations ii

talent and or popularity what does it take to be a superstar the phenomenon of superstars wherein small numbers of people earn enormous amounts of money and dominate the activities in which they engage seems to be increasingly important in the modern world rosen 1981 845 i introduction this the opening sentence of sherwin rosen s seminal paper the economics of superstars applies today more than ever technological change has increased the scope and the intensity of the so called winner takes all markets in the last decades the central question addressed in this article is what does it take to be a superstar why do some artists media stars professional athletes or executives earn disproportionately high salaries while others receive comparatively low remuneration in the literature there are basically two competing but not mutually exclusive theories of superstar formation proposed by rosen 1981 and adler 1985 1 although sherwin rosen explains how small differences in talent translate into large differences in earnings moshe adler argues that superstars might even emerge among equally talented performers due to the positive network externalities of popularity empirical tests of the different driving forces of superstar salaries have proved to be very difficult because an objective measure of a star s talent is often hard to find and even harder to quantify krueger 2005 for example what characterizes the talent of a pop music star the literature offers different approaches hamlen 1991 1994 uses the physical concept of voice quality which measures the frequency of harmonic content that singers use when they sing the word love in one of their songs but is such a high quality voice really a deciding factor for success in pop music krueger 2005 measures star quality by the number of millimeters of print columns devoted to each artist in the rolling stone encyclopedia of rock roll nevertheless as he admits this measure reflects the subjective importance the editors of the encyclopedia implicitly devote to each artist which may correlate both with the artist s talent and with his her popularity in team settings the difficulty of accurately measuring star talent is even greater as individual contributions to team output are mostly unclear however the empirical relevance of stars within teams is undoubted star ceos in top management teams lead singers of rock bands and star athletes on sports teams are just a few examples of superstars embedded in teams this article argues that rank order tournaments in professional sports allow a more accurate determination of talent than in the arts even though each athlete s performance is also affected by random events luck or other factors like weak fitness in individual sports it can typically be assumed that the most talented athlete enjoys the highest probability of winning as we examine superstars in a team setting namely in professional soccer we first estimate a team production function to identify the playing characteristics that significantly influence the probability of a team winning to do so we use the detailed statistics of the opta sports data company which counts and classifies every touch of the ball during the game by each player in a second step we use the individual performance statistics of all variables that have proved to be critical for winning as indicators of the player s talent we estimate the impact of talent popularity and various controls on the player s market value employing individual panel data from the highest german soccer league a player s popularity is measured by the annual press publicity he receives in over 20 different newspapers and magazines purged of the positive influences of on field performance so that our popularity indicator captures the nonperformance related celebrity status of a player we find empirical evidence that both talent and nonperformance related popularity increase the market values of soccer stars

orchestrating impartiality the impact of blind auditions on female musicians a change in the audition procedures of symphony orchestras adoption of blind auditions with a screen to conceal the candidate s identity from the jury provides a test for sex biased hiring using data from actual auditions in an individual fixed effects framework we find that the screen increases the probability a woman will be advanced and hired although some of our estimates have large standard errors and there is one persistent effect in the opposite direction the weight of the evidence suggests that the blind audition procedure fostered impartiality in hiring and increased the proportion women in symphony orchestras

rituals or good works social signaling in religious organizations we develop a model of social signaling of religiosity and cooperative behavior in religious organizations the model embeds a ritual based religious organization in which signaling arises through the use of costly rituals and a discipline based religious organization in which such signaling occurs through the monitoring of past behavior we use this framework to contrast positively and normatively these two forms of social signaling we show we develop a model of social signaling of religiosity and cooperative behavior in religious organizations the model embeds a ritual based religious organization in which signaling arises through the use of costly rituals and a discipline based religious organization in which such signaling occurs through the monitoring of past behavior we use this framework to contrast positively and normatively these two forms of social signaling we show that ritual based religions while using a costly and wasteful signal also imply a higher level of coordination of behavior in social interactions and a higher incidence of mutual cooperation our welfare analysis suggests that communities are more likely to support a switch to a discipline based religion if strategic complementarities are high and if there is sufficiently high level of public information about social behavior this accords with the success of calvin s reformation in switzerland and france a process characterized by the reduction of rituals along with the creation of institutions to monitor and publicize individuals behavior such as the consistory

testing the determinants of income distribution in major league baseball i introduction income of professional athletes is a frequent topic of discussion of fans sportscasters and the general public economists have also increasingly been attracted to this topic because the distribution of income of these players has both policy and business implications as a consequence the report of major league baseball s mlb blue ribbon panel formed in 1998 by mlb commissioner bud selig received quite a lot of attention this panel was charged with describing and explaining the economic condition of mlb comprised of such dignitaries as former federal reserve chairman paul volker senator george mitchell yale university president richard levin and columnist george will this panel reported that team payrolls have become increasingly disparate the gap between rich and poor teams is not only wide but is growing levin et al 2000 a case in point is the fact that the salary of the highest paid player in the 2000 season los angeles kevin brown at 15 7 million was 95 of the entire payroll of the poorest team the minnesota twins the effect according to the panel s report is a dramatic decline in parity and competitiveness of mlb since 1994 a team in the top payroll quartile has won every world series game in 1999 the teams with the five largest payrolls had an average winning percentage of 0 557 whereas the five poorest teams had a comparable figure of 0 444 the report discusses various recommendations that may narrow this gap leading to what one might call convergence in team payrolls this article examines the distribution of income in mlb for 1985 to 2000 we revive and extend a technique first suggested by thurow 1970 and show how it can be used to test for time trends versus cross sectional demographic and economic aspects influencing income distribution thurow 1970 discusses the impact of various measures on median income in the present case by calculating the gini coefficient we can discuss the impact that the explanatory variables have on income inequality in the context of mlb we attempt to shed light on the reasons why teams have greater or lesser payroll disparity we leave the question of the effect of between team payroll inequality on team wins and team revenues for future research the issue of whether to use an inequality measure that is based on a particular distribution or one that is distribution free has been widely discussed in the income distribution literature silber 1999 ryu and slottje 1999 in advocating the use of parametric distributions point to several benefits of estimating the lorenz curve in this manner these benefits include the ability to summarize thousands of observation points with a few parameters the ability to estimate the density function at any point an enhanced ability to construct inequality measures and the ability to formulate possible laws that would otherwise not be possible to detect however there are problems associated with the use of a parametric lorenz curve such as the choice of a suitable distribution the problem is compounded by the fact that income data are often grouped and have an open ended highest income category making it difficult to obtain accurate estimates one advantage of using professional sports data is the fact that the salary is available per individual and is not grouped consequently an actual number is available for the highest income this study analyzes payroll inequality in a professional sport by team that is for each year we calculate a measure of inequality for each mlb team and consider the characteristic differences in within team payroll distributions our study is not however the first to consider income inequality within professional team sports depken 2000 and jewell and molina 2004 find that mlb teams with greater wage disparity have fewer wins furthermore sommers 1998 finds a negative relationship between team success and within team payroll inequality using national hockey league data

was weber wrong a human capital theory of protestant economic history max weber attributed the higher economic prosperity of protestant regions to a protestant work ethic we provide an alternative theory protestant economies prospered because instruction in reading the bible generated the human capital crucial to economic prosperity we test the theory using county level data from late nineteenth century prussia exploiting the initial concentric dispersion of the reformation to use distance to wittenberg as an instrument for protestantism we find that protestantism indeed led to higher economic prosperity but also to better education our results are consistent with protestants higher literacy accounting for most of the gap in economic prosperity

reach for the stars a strategic bidding game we examine two sided competition in a duopoly market for differentiated products downstream the two firms compete in prices upstream they compete in bidding to hire talent input and there is one unique superstar the outcome depends on the downstream effect of only one firm employing the superstar when this intensifies downstream competition both firms are worse off than they would be if no superstar talent were available when the hiring of the superstar softens downstream competition both firms benefit but a winner s curse emerges in which the firm winning the superstar talent earns less profit than its rival

what s your identification strategy innovation in corporate finance research we study the diffusion of techniques designed to identify causal relationships in corporate finance research we estimate that the diffusion started in the mid 1990s lagged 20 years compared to economics and is now used in the majority of corporate finance articles consistent with recent theories of technology diffusion the adoption varies across researchers based on individuals expected net benefits of adoption younger scholars holders of phds in economics and those working at top institutions adopt faster adoption is accelerated through networks of colleagues and alumni and is also facilitated by straddlers who cross over from economics to finance our findings highlight new forces that explain the diffusion of innovation and shape the norms of academic research this paper was accepted by gustavo manso finance

introduction to the economics of religion after a very long hiatus economists have begun again to study the relationship between economics and religion this article seeks to summarize and evaluate the principal themes and empirical findings that have appeared in some 200 recent papers on the economics of religion although some of the research concerns the economic consequences of religiosity most applies standard economic theory to the study of individual religious activity the characteristics of religious groups and the impact of regulation and competition on religious markets

a stochastic model of superstardom an application of the yule distribution this study employs a stochastic model developed by g udny yule and herbert a simon as the probability mechanism underlying the consumer s choice of artistic products and predicts that artistic outputs will be concentrated among a few lucky individuals we find that the probability distribution implied by the stochastic model provides an excellent description of the empirical data in the popular music industry suggesting that the stochastic model may represent the process generating the superstar phenomenon because the stochastic model does not require differential talents among individuals our empirical results support the notion that the superstar phenomenon could exist among individuals with equal talent copyright 1994 by mit press

simultaneous determination of church contributions and church attendance in a standard model of household allocation of time and income church attendance and church contributions are determined simultaneously there are life cycle aspects to both attendance and contributions as azzi and ehrenberg 1975 and ehrenberg 1977 have argued and contributions behavior is affected by tax treatment and by a potential free rider problem as well this paper motivates an econometric specification which recognizes these features and estimates the parameters with a data set of over 2000 protestant church members

racial discrimination among nba referees the nba provides an intriguing place to assess discrimination referees and players are involved in repeated interactions in a high pressure setting with referees making split second decisions that might allow implicit racial biases to become evident we find that more personal fouls are awarded against players when they are officiated by an opposite race officiating crew than when they are officiated by an own race refereeing crew these biases are sufficiently large so that they affect the outcome of an appreciable number of games our results do not distinguish whether the bias stems from the actions of white or black referees

religious market competition in a richer world economic growth has not led to a decline in religion despite past predictions that it would using a formal model of religious competition i show how economic growth produces counteracting effects on religious activity in an open religious market and that it has little effect in a religious market that is already secularized due to regulations that prohibit religious competition or in a highly religious market with regulations that inhibit secular activities theories predicting the decline of religion due to rising opportunity costs of religious demand and supply ignore countervailing influences t he opinion is everywhere gaining ground that religion is a mere survival from a primitive age and its extinction only a matter of time crawley 1905 i think what i and most other sociologists of religion wrote in the 1960s about secularization was a mistake our understanding was that secularization and modernity go hand in hand it wasn t a crazy theory there was some evidence for it but i think it s basically wrong most of the world today is certainly not secular it s very religious berger 1997 1

the medieval monastery as franchise monopolist abstract medieval cistercian monasteries were monopoly franchisees of the roman catholic church and were engaged in the sale of the assurance of salvation a public choice theory of government which defines the spiritual goal as a collective expression of the common good facilitates an analysis within an economic as opposed to a spiritual framework the cistercian s exclusive territories assisted the organizational structure of successive monopoly between the church and the monasteries which is resolved by vertical integration and supported with vertical contractual restraints

determinants of securing academic interviews after tenure denial evidence from a zero inflated poisson model this paper uses a new data set to estimate empirically the optimal job search strategies for recently non tenured economists seeking to obtain an academic job estimates from a zero inflated poisson model suggest that a portion of interview counts is beyond the candidate s control as age colour of skin gender and citizenship all play a part in the interview decision a candidate can substantially enhance the probability of obtaining initial interviews by maintaining quality research and teaching portfolios however

the life cycle of a competitive industry firm numbers first rise then later fall as an industry evolves this nonmonotonicity is explained using a competitive model in which innovation opportunities fuel entry and relative failure to innovate prompts exit equilibrium time paths for price and quantity also share features of the data the model is estimated using data from the u s automobile tire industry a particularly dramatic example of the nonmonotonicity in firm numbers

upgrades switching costs and the leverage theory of tying this article investigates the role of product upgrades and consumer switching costs in the tying of complementary products previous analyses have found that a monopolist of one product will not increase its profits and reduce social welfare by tying and leveraging its monopoly position into a complementary market if the initial monopolised product is essential where essential means that all uses of the complementary good require the initial monopolised product we show that this is not true in settings characterised by product upgrades and consumer switching costs we also discuss various extensions including the role of the reversibility of tying

turnover and promotion of lawyers an inquiry into gender differences this paper analyzes the turnover and promotion of male and female lawyers using data on two cohorts of lawyers one which entered law firms between 1969 and 1973 and the other entering between 1980 and 1983 this study considers whether law firm promotion decisions have differed for women and if so whether these differences have declined over time a competing risks duration model is employed to capture the link between the lawyer s decision to stay or leave and the firm s decision to grant or deny promotion we find that over the entire sample period women are considerably less likely to be promoted and slightly more likely to leave the firm without being promoted however we also find that the parametric differential between men and women in partnership hazards has been reduced substantially and in the most general of our specifications eliminated across the two cohorts in contrast the gap between male and female job turnover rates does not appear to change over time we find that the gap between males and females in the cumulative partnership rate at seven years of experience falls from 32 to 14 percent the turnover gap increases about 0 2 percent with females slightly more likely to exit from the firm in the later period

evidence on discrimination in consumer markets economists have contributed to the measurement of racial and ethnic discrimination in consumption and to the identification of its causes especially in housing markets and car sales to test the hypothesis that discrimination exists economists have turned to regression analysis and to audits a matched pair survey technique economists also have developed audit based measures of the incidence and severity of discrimination audit studies find continuing high levels of discrimination against minorities in the marketing of available housing and in car prices audit studies also find that discrimination can be caused both by economic agents prejudice and by their search for profits

the economics of new blood abstract we construct a dynamic general equilibrium model of search and matching where public knowledge grows through time and workers accumulate a fraction of this knowledge through education retraining due to search delays the unemployment pool is populated by vintages of workers of differing productivities through intergenerational rivalry the human capital of older generations is rendered obsolete relative to that of the new blood higher knowledge growth exacerbates intergenerational competition thereby lowering education and growth while raising unemployment and inequality these findings help explain wage compression expansion and the hump shaped wage tenure profile across cohorts

intergenerational attitudes towards strategic uncertainty and competition a field experiment in a swiss bank with a market entry game inspired by camerer and lovallo 1999 we study the attitudes of junior and senior employees towards strategic uncertainty and competition seniors exhibit higher entry rates compared to juniors especially when the market capacity is not too low or when earnings from entry depend on relative performance this difference persists after controlling for attitudes towards non strategic uncertainty and for beliefs on others competitiveness and on relative ability seniors are more willing to compete when they predict a higher number of competitors this contradicts the stereotype of less competitive older employees

long term wage fluctuations with industry specific human capital exploiting long term interindustry demand shifts this article provides evidence that 1 industry level wages do not respond to industry demand conditions 2 at the industry level the employment of young workers responds more to demand shifts than does the employment of experienced workers and 3 the postdisplacement wages of displaced workers are strongly affected by demand in their predisplacement industries these findings are consistent with a model in which worker s investments in industry specific skills pose a barrier to interindustry labor mobility and wages do not respond to spot labor market conditions

culture openness and finance abstract differences in culture proxied by differences in religion and language cannot be ignored when examining why investor protection differs across countries we show that a country s principal religion predicts the cross sectional variation in creditor rights better than a country s natural openness to international trade its language its income per capita or the origin of its legal system catholic countries protect the rights of creditors less well than protestant countries a country s natural openness to international trade mitigates the influence of religion on creditor rights culture proxies are also helpful in understanding how investor rights are enforced across countries

perceived game uncertainty suspense and the demand for sport this study tries bridging between different behavioral economic explanations for the lack of support of the uncertainty of outcome hypothesis in spectator sports we test a measure of perceived game uncertainty that is comparable to objective measures frequently tested in the literature econometric results suggest that fans do not perceive closeness of a game differently than how economists have tended to measure it however fans perceptions of suspensefulness are distinct from their perceptions of game uncertainty moreover the finding that fans preferences for game uncertainty are dominated by loss aversion also emerges independently of fanship status in our stated preference setting jel l83 d12 z2

the medieval church and rents from marriage market regulations this paper addresses the medieval roman catholic church s attempts to monopolize the marriage market and to wrest control over the institution from secular authority in particular the paper highlights specific doctrinal innovations and evolving rules and regulations rules surrounding endogamy the definition of a valid marriages and the escape clauses established by the church are the principal features of the argument as is the place of these manipulations in the overall monopoly of the church

young stars in economics what they do and where they go we construct a data set of job flyouts for junior economists between 2013 and 2018 to investigate three aspects of the market for stars first what is the background of students who become stars second what type of research does the top of the market demand third where do these students take jobs among other results we show that stars are more likely to be international and male than phds overall that theoretical and semi theoretical approaches remain dominant that american programs both produce the most stars and hire even more that almost none are hired by the private sector and that there is a strong shift toward having pre phd full time academic research jobs jel a11 a12 a23 j24