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by Andreea Enache
Journal of Applied Econometrics

The paper examines how entry of new products affects market size and competition using a nested logit framework. Contrary to the usual view, it shows that when products are highly substitutable, even slightly better new products can both gain large market shares and expand total demand. Entry effects depend on (1) the quality gap vs. incumbents, (2) the degree of substitutability, and (3) how products are grouped into nests. We validate these theoretical results using simulations and empirical evidence from the French film industry.

by Andreea Enache
Journal of Economic Behavior & Organization

This study investigates how different ownership types in Swedish primary care responded to a policy change in provider payments. The reform reduced the fee per visit and increased fixed payments per registered patient. While all clinics reduced the number of doctor visits, the decline was most pronounced in investor-owned practices. Patient satisfaction was not affected differently across ownership types. The findings highlight that ownership structure influences how providers respond to financial incentives.

Comprehension in economic games

by Magnus Johannesson
Journal of Economic Behavior & Organization

Economic games are a key tool for studying cooperation and fairness. But many participants misunderstand how these games work—sometimes significantly. A new study using data from over 1,500 participants shows that such misunderstandings are common and can skew results, often making people appear more generous than they truly are.

Procuring unverifiable information

by Mark Voorneveld
Mathematics of Operations Research

What happens when an expert is tasked to gather information and report it to someone else, but can’t prove that they performed the required task, nor that the information they provide is accurately reported? This study shows how a principal can design a payment scheme that incentivizes the expert to act as desired.

by Martina Björkman Nyqvist
Journal of Development Economics

Climate change is making extreme weather more dangerous, especially in low-income countries. When rains fail during the growing season, infant deaths go up. This study shows that access to basic community healthcare can cut that risk by nearly half. As the climate gets more unpredictable, stronger healthcare systems could help protect the most vulnerable.

by Jörgen W. Weibull
Journal of Economic Theory

A new solution concept for finite games, called solid outcomes, is introduced. It is robust across game representations, consistent with backward induction, and unaffected by dominated strategies. Solid outcome sets exist in all finite games, and isolated solid outcomes exist in generic extensive-form games with perfect recall. The solution concept has strong selection power, even in generic normal-form games and performs well in classical examples in game theory. Algorithms efficiently identify minimal game blocks, the subsets of strategy profiles that support these outcomes.

by Anna Dreber and Magnus Johannesson
PNAS

We appreciate KHJ's interest in our study and agree with their theoretical points, particularly regarding the limited heterogeneity in WEIRD samples. However, we question KHJ's empirical claims on population heterogeneity, noting that KSJ's paradigms were designed to enhance heterogeneity. Revisiting KSJ's data shows lower heterogeneity estimates than KHJ suggests, especially after excluding inattentive participants. Our findings highlight that online data collection may inflate heterogeneity, underscoring the need for further research.

by Jaakko Meriläinen
Journal of the European Economic Association

Elected politicians in Finland score higher on cognitive and non-cognitive tests than the general population. Local politicians perform on par with high-skill workers, while national politicians score even higher. This suggests voters and parties select a more competent, motivated, and honest political class.

by Karl Wärneryd
Economics Letters

We consider groups that compete to set policy, and show that there may be an incentive to change group composition with respect to policy preferences in such a fashion that equilibrium policies ultimately converge across groups.