The Scandinavian Journal of Economics

Publisher:: Wiley
Publication date:: 2021-02-01

ISBN:: 0347-0520

Issue Number

No. 126-1, January 2024

Latest documents

Asymmetric market power and wage suppression
We study a labor market in which two identical firms compete over a pool of homogeneous workers. Firms pre‐commit to their outreach to potential employees, either through their informative advertising choices, or through their screening processes, before engaging in a wage (Bertrand) competition. Although firms are homogeneous, the unique pure‐strategy equilibrium is asymmetric: one firm maximizes its outreach whereas the other compromises on a significantly smaller market share. The features of the asymmetric equilibrium extend to a general oligopsony with any finite number of firms.
Durable goods and consumer behavior with liquidity constraints
This paper presents an integrated model of intratemporal demand and intertemporal consumption, with allowance for durable goods and liquidity constraints. Demand equations for non‐durable and durable goods with the user cost of durable goods are jointly estimated with a consumption Euler equation incorporating liquidity constraints for Norwegian consumers from 1978 to 2018. Results show that demand analyses ignoring durable goods lead to a significant bias in the elasticities of non‐durable goods. Norwegian consumers are found to be impatient, with low risk aversion. There is weak evidence for liquidity constraints in consumption. No strong evidence exists for intertemporal substitution in consumption, but a considerable effect of uncertainty is found in durable consumption.
Altruistic behavior and soccer: the effect of incidental happiness on charitable giving
This study investigates the impact of incidental happiness associated with the outcome of the Dutch national soccer championship on charitable giving shortly after the decisive match. We use survey data in which participants were asked to make an anonymous donation of an earned endowment. For estimating the causal effect of happiness on charitable giving, we exploit the variation in the emotions of fans between and within teams using two complementary empirical approaches. The first approach is based on the preference of fans for local teams. We find that individuals living closer to the city of the new champions (Amsterdam) are happier and also more likely to donate to charity than individuals living further away. Importantly, distance to Amsterdam does not affect charitable giving in a placebo sample of individuals with no interest in soccer. The second approach exploits variation between different types of fans within teams. Allegiant fans, individuals who attended a match, are happier and more likely to donate to charity than “stay‐at‐home” fans when their team wins the title. Allegiant fans are less happy and less likely to donate than stay‐at‐home fans when their team does not win the title. Instrumental variable estimates suggest a large effect of incidental happiness on charitable giving.
Decomposing gender wage gaps: a family economics perspective
We propose a simple way to embed family‐economics arguments for pay differences between genders into standard decomposition techniques. To account appropriately for the role of the family in the determination of wages, one has to compare men and women with similar own characteristics – and with similar partners. In US survey data, we find that our extended decomposition explains considerably more of the wage gap than a standard approach, in line with our theory that highlights the role of career prioritization in dual‐earner couples.
Competing with precision: incentives for developing predictive biomarker tests
We study the incentives of drug producers to develop predictive biomarkers, taking into account strategic interaction between drug producers and health plans. For this purpose, we develop a two‐dimensional spatial framework that allows us to capture the informational role of biomarkers and their effects on price competition and treatment choices. Although biomarkers increase the information available to prescribers, we identify an anticompetitive effect on the prices set by producers of therapeutically substitutable drugs. We also find that better information about each patient's most therapeutically appropriate drug does not necessarily lead to more efficient treatment outcomes.
Frisch elasticities in a model of indivisible labor supply with endogenous workweek length
In this paper, I provide an extension of the classical indivisible labor supply model where a large macro Frisch elasticity is reconciled with a small micro counterpart. Households take as given state‐dependent hours per worker – shaped by a nonlinear mapping from hours worked to labor services and employment frictions – and make intertemporal labor supply decisions. In the standard indivisible labor supply model, aggregate fluctuations are independent of the individual preference parameter that governs the intensive‐margin elasticity. In my model, however, they are connected through the extensive margin whose elasticity is empirically reasonable and is shaped by the individual preference parameter.
Welfare‐improving tax evasion
We study optimal income taxation in a two‐group framework where the private cost of misreporting income is positively correlated with productivity. If high‐wage types always reveal their income truthfully, then letting low‐wage types cheat leads to Pareto‐superior outcomes regardless of the audit costs (as compared to deterrence). With no cheating, redistribution takes place on first‐ or second‐best frontiers and low‐wage types always end up worse off than high‐wage types. Letting low‐wage types misreport reduces the need to recourse to second‐best mechanisms. Additionally, it increases the reach of first‐best redistribution to outcomes at which low‐wage types are better off than high‐wage types.
Transnational crimes: how nations should cooperate and why they don't*
Chain‐form crime partnerships and intelligence sharing by national authorities to detect cross‐border partners create multiple externalities in the combat against transnational crimes and illicit trafficking. Cooperative enforcements that minimize global harms prioritize the country with lower intelligence production and/or superior detection capability. In equilibrium, as in practice, national enforcements are underbudgeted and might prioritize the wrong side – predominantly the high‐budget, high‐harm country. Governments might not share intelligence out of fear of importing enforcement burden, and harmonizing criminal sanctions alone might not be effective. Shocks on crime deterrence in a target country are first absorbed by source countries, implying weaker horizontal crime transfer effects than projected.
The effect of compulsory face mask policies on community mobility in Germany*
There is an ongoing debate about face masks being made compulsory in public spaces to contain COVID‐19. A key concern is that such policies could undermine efforts to maintain social distancing and reduce mobility. We provide first evidence on the impact of compulsory face mask policies on community mobility. We exploit the staggered implementation of policies by German states during the first wave of the pandemic and measure mobility using geo‐located smartphone data. We find that compulsory face mask policies led to a short‐term reduction in community mobility, with no significant medium‐term effects. We can rule out even small increases in mobility.
The roots of inequality: estimating inequality of opportunity from regression trees and forests*
We propose the use of machine learning methods to estimate inequality of opportunity and to illustrate that regression trees and forests represent a substantial improvement over existing approaches: they reduce the risk of ad hoc model selection and trade off upward and downward bias in inequality of opportunity estimates. The advantages of regression trees and forests are illustrated by an empirical application for a cross‐section of 31 European countries. We show that arbitrary model selection might lead to significant biases in inequality of opportunity estimates relative to our preferred method. These biases are reflected in both point estimates and country rankings.