arXiv preprints from January 1, 2026 through September 5, 2026 — 01:26:25 EST
Generative AI relocates the fixed cost of automation. A model provider pays to train a frontier system, while a downstream firm rents capability by usage; the same firm must carry a continuing payroll to supply a human-augmented service. We study this asymmetry in a local service economy with household budgets and a market-clearing...
We develop a theory of measurement scales for utility functions, based on a generalization of the notion of numeraire commodity. Every sufficiently well-behaved utility is denominated in some scale of this form, and conversely, the choice of a compatible scale unit uniquely identifies utilities up to an additive constant. We define a...
Comparing economic models requires balancing fit against flexibility. Yet standard selection criteria often proxy flexibility using parameter counts, overlooking differences due to functional form and experimental design. This paper introduces a data compression approach for evaluating economic models. Following the Minimum...
This paper proposes a nonparametric Bayesian inference framework for partially identified discrete response models. The key observation is that these models map a reduced-form conditional choice probability to an identified set. Consequently, nonparametric Bayesian inference for the conditional probability mass function leads to...
Natural hazards are a nonmarket disamenity that affects an individual's search for employment resulting in a negative environmental impact that produces an economic inefficiency. We develop a seek-and-screen job search approach that uses a discrete choice simulation to examine how salary, crime, and natural hazard risk influence job...
Can altruism serve as the behavioral foundation for efficient institutional design? We study full implementation in Berge equilibrium, the solution concept that formalizes strategic altruism: each agent's opponents collectively maximize her payoff. While Berge equilibrium resolves the Prisoner's Dilemma and can eliminate cooperation...
Artificial intelligence (AI) interacts with climate in various ways, while a unified analytical framework of this intricate interplay is lacking. To align AI investment with climate policy, we propose such a framework integrating AI's impact on emissions, output, and climate damages into the DICE model. We distinguish between ICT-like...
We study the strategic impact of ambiguity through the channel of higher-order beliefs. We show that even small amounts of prior ambiguity about game payoffs can generate arbitrarily large amounts of higher-order ambiguity. This gives rise to a novel form of contagion: vanishingly small payoff ambiguity can select ``secure'' actions...
We examine how macroeconomic and geopolitical developments in the United States, the euro area, and China affect the currency composition of central banks' foreign exchange reserves. Using an unbalanced panel of reserve shares for 53 countries over 1999-2023, we estimate a constrained system of equations that explicitly imposes the...
We study auctions with costly entry in which bidders have incomplete information about their affiliated private valuations prior to entry. We examine whether indicative bidding--a mechanism requiring non-binding preliminary bids before entry--can stimulate participation and improve entrant selection, and we compare its performance...
This article surveys two deeply connected literatures that approach the same fundamental problem from different disciplinary traditions: dynamic discrete choice (DDC) in structural econometrics and inverse reinforcement learning (IRL) in machine learning. Both seek to infer the preferences of decision makers from observed sequential...
We study how competition among biased news sources affects information and welfare when sources can misrepresent facts at a cost. Monopolistic and competitive market structures admit many equilibria. We develop a common belief-based selection criterion that applies to both and makes welfare comparisons possible. Under the refined...
Online ratings turn a long review history into one public number. This makes sellers easier to compare, but it also gives them a single clear target to manipulate. We study a low-quality seller who can add fake reviews carrying different scores, buyers who infer quality from the displayed average, and a platform that can target...
We study dynamic linear panel data models in which the lagged outcomes and strictly exogenous covariates carry individual-specific coefficients and the time-varying errors have a flexible covariance structure. With a fixed number of time periods, we point-identify the joint distribution of the random coefficients and the structural...
Econometric models offer parsimonious but inexact approximations to data-generating processes. This paper studies the generalized method of moments (GMM) when exchangeable specification errors of order $n^{-1/2}$ contaminate the moment conditions. I develop estimators for the mean and variance of these specification errors,...
This non-technical survey introduces the topic of groundwater management to the mathematics and statistics communities. We focus on the emerging marketplaces for groundwater pumping rights, outlining probabilistic and statistical approaches to groundwater dynamics and game equilibria that underpin stakeholder decisions. After...
Problem definition: Solar electricity generation is a strategic component of energy portfolios designed to meet growing demand and reduce carbon emissions. Governments and municipalities encourage household photovoltaic (PV) adoption through upfront rebates and tax credits. Limited budgets require principled, data-driven policies that...
We study deterministic choice when the same decision maker is observed before and after a deliberative intervention that makes one of two fixed ordinal consequence dimensions more salient. Both choice modes are path independent. Ordinary choice respects two-dimensional dominance, while any binary reversal under fuller deliberation...
This paper develops a procedure for uncovering the common cyclical factors that drive a mix of stationary and nonstationary variables. The method does not require knowing which variables are nonstationary or the nature of the nonstationarity. An application to the FRED-MD macroeconomic dataset demonstrates that the approach offers...
Green-patent indicators based on Cooperative Patent Classification Y02 tags increasingly inform research, industrial policy, and climate-oriented investment, yet their construct validity has not been evaluated at corpus scale. We ask whether Y02 classification errors are random measurement noise or systematic, direction-specific bias....
Artificial intelligence (AI) is transforming measurement in economics. AI models convert unstructured data, such as text and images, into structured variables at low cost, making previously prohibitive measurement feasible at scale. This shifts the bottleneck from finding any scalable measure of a phenomenon to choosing among many...
In panels with sample selection (that may occur due to attrition, nonresponse, etc.), the assumption of selection on observables (missing at random, MAR) is commonly imposed despite often being implausible. However, this assumption becomes testable when a refreshment sample is available. We develop a statistical test of MAR based on a...
Green-patent indicators built on Cooperative Patent Classification Y02 tags are widely used in research, policy, and investment, yet their construct validity has not been audited at corpus scale. We assess whether Y02 is systematically biased and whether that bias may reinforce the ESG innovation disconnect. We introduce an...
We develop a unified approach to optimal grading in an all-pay contest in which a designer assigns a fixed vector of heterogeneous prizes to maximize expected total effort. The approach covers two information regimes and identifies a common principle: iron locally misordered incentive returns and assign prizes assortatively across the...
Constitutions as the formal foundation of a country's legal and political system have important economic and political effects. Yet, we still know little about why constitutions set effective constraints on politicians in some societies, while being largely disregarded in others. Here, we ask if national culture matters for...