Publications
We study a simple model in which two vertically differentiated firms compete in prices and mass advertising on an initially uninformed market. Consumers differ in their preference for quality. There is an upper bound on prices since consumers cannot spend more on the good than a fixed amount (say, their income). Depending on this income and on the ratio between the advertising cost and quality differential (relative advertising cost), either there is no equilibrium in pure strategies or there exists one of the following three types: (1) an interior equilibrium, where both firms have positive natural markets and charge prices lower than the consumer’s income; (2) a constrained interior equilibrium, where both firms have positive natural markets, and the high-quality firm charges the consumer’s income or (3) a corner equilibrium, where the low-quality firm has no natural market selling only to uninformed customers. We show that no corner equilibrium exists in which the high-quality firm would have a null natural market. At an equilibrium (whenever there exists one), the high-quality firm always advertises more, charges a higher price and makes a higher profit than the low-quality one. As the relative advertising cost goes to infinity, prices become equal and the advertising intensities converge to zero as well as the profits. Finally, the advertising intensities are, at least globally, increasing with the quality differential. Finally, in all cases, as the advertising parameter cost increases unboundedly, both prices converge increasingly towards the consumer’s income.
Background Within the International Health Regulations framework, the French High Council for Public Health was mandated in 2022 by health authorities to establish a list of priority infectious diseases for public health, surveillance and research in mainland and overseas France. Aim Our objective was to establish this list. Methods A multi-criteria decision analysis was used, as recommended by the European Centre for Disease Prevention and Control. A list of 95 entities (infectious diseases or groups of these, including the World Health Organization (WHO)-labelled ‘Disease X’) was established by 17 infectious disease experts. Ten criteria were defined to score entities: incidence rate, case fatality rate, potential for emergence and spread, impact on the individual, on society, on socially vulnerable groups, on the healthcare system, and need for new preventive tools, new curative therapies, and surveillance. Each criterion was assigned a relative weight by 77 multidisciplinary experts. For each entity, 98 physicians from various specialties rated each criterion against the entity, using a four-class Likert-type scale; the ratings were converted into numeric values with a nonlinear scale and respectively weighted to calculate the entity score. Results Fifteen entities were ranked as high-priorities, including Disease X and 14 known pathologies (e.g. haemorrhagic fevers, various respiratory viral infections, arboviral infections, multidrug-resistant bacterial infections, invasive meningococcal and pneumococcal diseases, prion diseases, rabies, and tuberculosis). Conclusion The priority entities agreed with those of the WHO in 2023; almost all were currently covered by the French surveillance and alert system. Repeating this analysis periodically would keep the list updated.
This study examines the acceptance of artificial intelligence (AI)-based diagnostic alternatives compared to traditional biological testing through a randomized scenario experiment in the domain of neurodegenerative diseases (NDs). A total of 3225 pairwise choices of ND risk-prediction tools were offered to participants, with 1482 choices comparing AI with the biological saliva test and 1743 comparing AI+ with the saliva test (with AI+ using digital consumer data, in addition to electronic medical data). Overall, only 36.68% of responses showed preferences for AI/AI+ alternatives. Stratified by AI sensitivity levels, acceptance rates for AI/AI+ were 35.04% at 60% sensitivity and 31.63% at 70% sensitivity, and increased markedly to 48.68% at 95% sensitivity (p <0.01). Similarly, acceptance rates by specificity were 29.68%, 28.18%, and 44.24% at 60%, 70%, and 95% specificity, respectively (P < 0.01). Notably, AI consistently garnered higher acceptance rates (45.82%) than AI+ (28.92%) at comparable sensitivity and specificity levels, except at 60% sensitivity, where no significant difference was observed. These results highlight the nuanced preferences for AI diagnostics, with higher sensitivity and specificity significantly driving acceptance of AI diagnostics.
This paper develops a search and matching framework in which workers are characterized by asymmetric reference-dependent reciprocity and firms set wages by considering the effect that these can have on workers' effort and, therefore, on output. The cyclical response of effort to wage changes can considerably amplify shocks, independently of the cyclicality of the hiring wage, which becomes irrelevant for unemployment volatility, and firms' expectations of downward wage rigidity in existing jobs increases the volatility of job creation. The model is consistent with evidence on hiring and incumbents' wage cyclicality, and provides novel predictions on the dynamics of effort.
Recent papers use regression discontinuity designs (RDDs) based on age discontinuity to evaluate social assistance (SA) and unemployment insurance (UI) extension policies. Job search theory predicts that such designs generate biased estimates of the policy-relevant treatment effect. Owing to market frictions, people below the age threshold modify their search behavior in expectation of future eligibility. We use a job search model to quantify the biases on various datasets in the literature. The impacts of SA benefits on employment are underestimated, whereas those of UI extensions on nonemployment duration are overestimated. The article provides insights for RDD evaluations of age-discontinuous policies.
We expand the theory of politician quality in electoral democracies with citizen candidates by supposing that performance while in office sends a signal to the voters about the politician's valence. Individuals live two periods and decide to become candidates when young, trading off against type-specific private wages. The valence signal increases the reelection chances of high valence incumbents (screening mechanism of reelection), and thus their expected gain from running for office (self-selection mechanism). Since self-selection improves the average quality of challengers, voters become more demanding when evaluating the incumbent's performance. This complementarity between the self-selection and the screening mechanisms may lead to multiple equilibria. We show that more difficult and/or less variable political jobs increase the politicians' quality. Conversely, societies with more wage inequality have lower quality polities. We also show that incumbency advantage blurs the screening mechanism by giving incumbents an upper-hand in electoral competition and may wipe out the positive effect of the screening mechanism on the quality of the polity.
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Using data on roughly half a million cases and 10,000 judges from Pakistan and India, Mehmood et al. estimate the impact of the Ramadan fasting ritual on criminal sentencing decisions. They find that fasting increases judicial leniency and reduces reversals of decisions in higher courts. We estimate the impact of the Ramadan fasting ritual on criminal sentencing decisions in Pakistan and India from half a century of daily data. We use random case assignment and exogenous variation in fasting intensity during Ramadan due to the rotating Islamic calendar and the geographical latitude of the district courts to document the large effects of Ramadan fasting on decision-making. Our sample comprises roughly a half million cases and 10,000 judges from Pakistan and India. Ritual intensity increases Muslim judges' acquittal rates, lowers their appeal and reversal rates, and does not come at the cost of increased recidivism or heightened outgroup bias. Overall, our results indicate that the Ramadan fasting ritual followed by a billion Muslims worldwide induces more lenient decisions.
