Economics Insights @ CBS

This paper provides new evidence on time use and subjective well-being of employed and unemployed individuals in 14 countries. We devote particular attention to characterizing and modeling job search intensity, measured by the amount of time devoted to searching for a new job. Job search intensity varies considerably across countries, and is higher in countries that have higher wage dispersion. We also examine the relationship between unemployment benefits and job search.

This article characterizes optimal policy when a government uses indirect control toexert its authority. Wedevelopadynamicprincipal-agent model inwhich a principal (a government) delegates thepreventionof a disturbance–suchas riots, protests, terrorism, crime, or tax evasion–to an agent who has an advantage in accomplishing this task. Our setting is a standard repeated moral hazard model with two additional features. First, the principal is allowed to exert direct control by intervening with an endogenously determined intensity of force which is costly to both players.

This paper provides evidence of the real effects of financial markets. Using mutual fund redemptions as an instrument for price changes, we identify a strong effect of market prices on takeover activity (the "trigger effect"). An inter-quartile decrease in valuation leads to a 7 percentage point increase in acquisition likelihood, relative to a 6% unconditional takeover probability. Instrumentation addresses the fact that prices are endogenous and increase in anticipation of a takeover (the "anticipation effect").

Five experiments tested the hypothesis that there is a bi-directional link between ideological (multiculturalism and color-blindness) and self-regulatory (perspective-taking and stereotype-suppression) approaches to managing diversity. A first set of experiments found that exposure to multiculturalism facilitated perceptual and conceptual forms of perspective-taking.

Using informant reports on working professionals, we explored the role of listening in interpersonal influence and how listening may account for at least some of the relationship between personality and influence. The results extended prior work which has suggested that listening is positively related to influence for informational and relational reasons.