Abstract: Miller(1977) or Harrison and Kreps(1978) show asset price is higher in heterogeneous model than common prior model. They assume no budget constraint or no limitation of financial market. Recent study explore the role of financial technology in heterogeneous belief model. In this paper, I show that some financial technology make the asset price as high as Harrison and Kreps. Key technology is securitization and especially loan backed security.

Abstract: Having low income is one of the requirements for Medicaid eligibility. However, low income may result not only from low productivity but also from low work effort. In this paper we ask two questions: 1) Does Medicaid significantly distort work incentives? 2) Can the insurance-incentives trade-off of Medicaid be improved without changing the size of the redistribution in the economy? Our tool is a general equilibrium model with heterogeneous agents that matches many important features of the data. We find that around 20% of Medicaid enrollees do not work in order to be eligible. Our policy analysis builds on the insights from the New Dynamic Public Finance literature. We start with the full information benchmark where individuals’ productivity is public information and can be used to determine Medicaid eligibility. Then we explore policies that can replicate this outcome in the environment where productivity is unobservable. We show that asset testing is effective in eliminating labor supply distortions among Medicaid beneficiaries. However, this policy creates large saving distortions and brings small welfare gains. To achieve welfare gains close to the full information benchmark, asset limits should be different for workers and non-workers.

Abstract: In this paper, we analyze the nature of intra-household allocations and commitment using unique panel data on individual-specific consumption expenditures and on time used for leisure, market production and home production. We find that the household weight on the wife is strongly related to her relative market productivity at the time of marriage in the cross-section. Additionally, within households the weight is related to unpredicted changes in relative wages, indicating limited commitment to time of marriage allocations. This lack of commitment means that households do not take full advantage of the potential income gains available by adjusting relative hours in response to relative wage changes. Similarly, this lack of commitment prevents spouses from attaining full risk sharing within the household. Compared to full commitment, wage shocks lead to excessive within household consumption dispersion.

Abstract: There is a potential free-rider problem when several siblings consider future provision of care for their elderly parents. Siblings can commit to not providing long-term support by living far away. If location decisions are made by birth order, older siblings may enjoy a first-mover advantage. We study siblings' location decisions relative to their parents by estimating a sequential participation game for US data. We find: (1) limited strategic behavior: in two-child families, more than 92% of children have a dominant strategy; and (2) a non-negligible public good problem: in families with multiple children, 18.3% more parents would have had at least one child living nearby had location decisions been made cooperatively.

Abstract: We investigate the optimal job design in a repeated principal-agent relationship with multiple tasks where the performance measurement is distorted, aggregated, and nonverifiable. We compare task bundling where all the tasks are assigned to a single agent with task separation where the tasks are split and assigned to two agents. Compared to task bundling, task separation mitigates misallocation of efforts among the tasks but requires more commitment due to dispersion of informal bonuses to multiple agents. As a result, task separation is better than task bundling if and only if the discount factor of the parties is high. We furthermore show that the optimal job design may exhibit task exclusion, in which only a single agent is employed but the assigned tasks are limited.

Abstract: This paper studies infinite-horizon stochastic games in which players observe payoffs and noisy public information about a hidden state each period. Public randomization is available. Very generally, the feasible and individually rational payoff set is invariant to the initial prior about the state, in the limit as the discount factor goes to one. We provide a recursive characterization of the equilibrium payoff set and establish the folk theorem.

Abstract: Existing studies repeatedly show that individual health improves during economic downturns in developed countries using mortality as health measures. This study examines the relationship between macroeconomic conditions and general health of individuals in Japan, a country with an economic structure distinct from that of the US and other developed countries. We use nationally representative data of more than 2 million Japanese between 1998 and 2010, the period during which the country experienced sizable macroeconomic fluctuations from post “lost decade” and the global financial crisis. We find that self-reported health status is negatively associated with unemployment rate, which is qualitatively consistent with findings from previous studies. However, our results show that unlike in the US, the impact is not most pronounced for the working-age population, and lower-income individuals and the elderly are most affected by economic conditions. Moreover, the impact was reversed for some population, and a negative influence from recessions was observed among middle age male workers. The difference in the affected population from the previous US studies is likely due to the difference in the labor market conditions, which is one of the key mechanisms on the impact of business cycles on health.

Abstract: It is well known that multi-sender signalling games have a plethora of equilibria. Bagwell and Ramey (1991) proposed a refinement criterion unprejudiced belief to demonstrate that the no distortion fully revealing equilibrium is the only "plausible" equilibrium in their oligopoly limit pricing model. After Bagwell and Ramey (1991), unprejudiced belief refinement is often used in refining equilibria in multi-sender signaling games. This paper examines the relationship between unprejudiced belief and a standard equilibrium refinement based on Kohlberg and Mertens' (1986) strategic stability. We first show that in a general class of games including Bagwell and Ramey (1991), stability implies unprejudiced belief and gives the same prediction as Bagwell and Ramey (1991). We further show, however, that forward induction in the spirit of Kohlberg and Mertens (1986) does not imply unprejudiced belief.

Abstract: We combine two previous methods for testing the sustainability of government debt and apply the Covariate Augmented Dickey-Fuller Test to U.S. data check whether the debt is unit root to check the “Locally” Ricardian. At the same time, we apply the estimation method to determine the existence of a bubble and ascertain whether “Globally” Ricardian is satisfied. We show that “Global” Ricardian is satisfied, but “Locally” Ricardian is not.

Abstract: In vertically related industries, antitrust agencies have a concern about the possibility that vertical integration facilitates collusion among upstream firms. However, at least theoretically, it is well known that vertical integration has two opposing effects on collusion. Vertical integration reduces integrated firms’ incentive to collude by weakening punishment that unintegrated firms provide, because integrated firms continue to supply their downstream affiliates even in a punishment phase. On the other hand, vertical integration increases uninte- grated firms’ incentive to collude by reducing the number of outlets that they can supply when they deviate from collusion. This paper examines empirically whether vertical integration facilitates collusion among upstream firms, using the Japanese cement and concrete industries. The effect of vertical integration on collusion among cement firms is partially identified in the following two steps. First, the informative interval on the collusion probability is derived based on cartels detected by Japan’s antirust agency. Then, the lower and upper bounds on the effect of vertical integration on the collusion probability are identified.The estimated bounds indicate that vertical integration in the industries facilitated cement firms’ collusion.

Abstract: Does a high employment rate among peers increase one’s own employment probability? We exploit the random assignment of temporary housing to evacuees from the Fukushima Daiichi nuclear power plant accident to identify the effect of neighbors’ employment rate on the probability of finding a job after evacuation. We use unique survey data collected in 14 clusters of temporary housing 2.5 years after the accident, to estimate the effect of the ratio of neighbors who had already been working before moving to the temporary housing on the length of time that passed until the initially unemployed evacuees restarted work. We find a significantly positive peer effect―a one-standard-deviation increase in the initial employment rate of one’s peers makes the hazard of restarting work 1.53 times larger during the six months after the move-in. Furthermore, we test social norms to work and information sharing as the potential underlying mechanism of the observed peer effect, and we find suggestive evidence for social norms.

Abstract: In this paper, We compare revenues in hybrid auctions with speculative resale. We consider a hybrid auction in the first stage with symmetric independent private values (IPV) among N regular bidders and one speculator who has no value for the object. The winner pays a weighted sum of the winning bid and the highest losing bid with θ ∈ (0;1] being the weight for the winning bid. In the second stage there is resale among the bidders. The winner in the first stage auction uses an optimal mechanism to sell the object to the losing bidders. There is revenue equivalence when N = 1: When N > 1; revenue is increasing in θ. We conjecture that this ranking result is independent of the bid revelation policy. We discuss why the ranking differs from that of common-value auctions even though the auction with resale model here is strategically equivalent to a common-value auction.

Abstract: This study analyzes choice under the presence of some conflict that affects the deci- sion time. We axiomatize a multiattribute decision time representation (MDT), a dynamic extension of the classic multiattribute expected utility theory that allows potentially in- complete preferences. Under this framework, one alternative is preferred to another in a certain period if and only if the weighted sum of the attribute-dependent expected utility induced by the former is larger than that induced by the latter for all attribute weights in a closed and convex set. MDT uniquely determines the decision time and the comparative statics result indicates that the decision time provides useful information to specify indif- ference curves. MDT also explains various empirical findings in economics, psychology, and other relevant fields.

Abstract: This paper examines whether tax mimicking occurs in municipal health insurance tax in Japan. To uncover the causal effect of strategic mimicking behavior among neighboring municipalities, we exploit the fact that insurance tax levels sharply dropped when municipalities experienced municipal amalgamation during the Heisei Great Amalgamation, which took place during mid-2000s. Utilizing the incidence of adjacent amalgamation as an instrumental variable, we investigate how insurance tax levels in adjacent municipalities affect tax levels in non-amalgamated municipalities. Results suggest that there is significant mimicking behavior for non-amalgamated municipalities which insurance tax levels were higher than those of neighbors before the Heisei Great Amalgamation. The other non-amalgamated municipalities do not respond to changes in adjacent insurance tax levels.

Abstract: Japan’s prefectures have recently adopted ordinances to exclude organized crime syndicates, the yakuza, from society. The yakuza exclusion ordinances (YEO) are in nature third party policing that prohibits citizens and companies from having a relationship with yakuza members. The purpose of the YEO is to cut off the flow of funding to the yakuza. Consequently the yakuza's activity and power appeared to decline after the YEO, while we expect that former or incumbent members of the yakuza struggle to find other economic opportunities due to the YEO and that they are prone to commit lucrative crime. Furthermore, we argue that the effects of the YEO are larger in prefectures where yakuza competition is less, because yakuza members are discouraged from resigning from their syndicate in more competitive areas for the sake of turf wars. To test these ideas, we take a difference-in-differences approach by exploiting prefecture-level variations of enactment dates and competitiveness among different yakuza syndicates. We show that the YEO have sharply reduced the yakuza membership and that this reduction effect is smaller in prefectures where different yakuza syndicates fight intensively. Subsequently, we find that the YEO have increased total financial damage of bank transfer scams and that this effect is greater in prefectures with less yakuza competition. Lastly, our supplementary analysis using ward level panel data in Tokyo shows that the YEO have increased the number of arrests for frauds committed by yakuza members, while arrests of other crimes committed by yakuza members have decreased after the YEO.

Abstract: Previous studies have well documented that individuals with poorer health tend to be economically disadvantaged. The relationship between health and income is often referred to as "health-income gradient". "When low income and poor health go together, the poor are doubly deprived and thus have a greater claim on our attention than is warranted from their incomes alone." (Deaton, 2002). Such concerns differentiate the inequality associated with health from other poverty issues and drive growing debate on what policy makers can do to reduce the double burden for those in the bottom tail of income distribution. To address this issue, it is critical to first develop a comprehensive understanding of the heterogeneity of "health-income gradient", taking into account the complicated interactions among income, health and aging process. Yet such analysis has received little attention so far. To fill the gap, we adopt the newly developed unconditional quantile regression (UQR) approach (Firpo et. al., Econometrica, 2009) to analyze how household incomes vary by health status at different points along income distribution for different age groups. Unlike traditional quantile regression (QR) which estimates the effect of a covariate on the quantiles conditional on specific values of other covariates, the UQR allows us to derive more generalizable results as it gets at the impact on the quantiles of the unconditional distribution of income. Moreover, we investigate three measures of household economic resources separately, namely household pre-tax annual income, household disposable annual income, and household monthly expenditure, to analyze the impact of redistributive policies. Using rich data from the Comprehensive Survey of Living Conditions collected from 1989 to 2010 in Japan, we find the following major results. (a) "Health-income gradient" varies significantly along the distribution of income: it is the largest for the bottom tail, graduall y decreasing until somewhere around the 50th percentile, and flattens out towards the top tail. (b) Compared to the UCQ results, the QR significantly under-estimates the gradient for those in the bottom tail, while over-estimates it for the middle and top income groups. (c) Significant heterogeneity exists across age groups, especially for those in the bottom tail of income distribution,- i.e. the gradient increases at age, reaching its peak around age 45-55 and then gradually drops. However, age matters much less for the middle and high income groups. (d) The relationship between health and pre-tax income is very similar to that between health and disposable income, suggesting little net effect of redistributive policies in Japan on reducing the existing "health-income gradient".

Abstract: TBA

Abstract: TBA

Abstract: Firms and governments often use moral suasion and economic incentives to influence intrinsic and extrinsic motivations for various economic activities. To investigate the persistence of such interventions, we randomly assigned households to moral suasion and dynamic pricing that stimulate energy conservation during peak demand hours. Using household-level consumption data for 30-minute intervals, we find significant short-run effects of moral suasion, but the effects diminished quickly after repeated interventions. Economic incentives produced larger and persistent effects, which induced habit formation after the final interventions. While each policy produces substantial welfare gains, economic incentives provide particularly large gains when we consider persistence.