Monthly Archives: March 2012

In the late 1970s, two psychologists named Kahnemann and Tversky, questioned the expected utility theory that had been previously developed by economists. This work was the first publication in a major economics journal by non-economists, and eventually this pair was awarded a Nobel Prize. Belen Chavez, Yan Huang, Tanya Mallavarapu, and Quanhe Wang presented this [...]

Paul Courant explored a theory of Racial Prejudice in a Search Model of the Urban Housing Market, where he concluded that if whites are averse to selling their homes to blacks, an equilibrium in which blacks pay more than whites is sustainable, causing the housing market to be racially segmented. Enjoy the notes compiled by [...]

Besley and Prat discuss the role of the media in government accountability. What happens when a politician is able to bribe the media? How does this affect the politician’s relationship with the voters? Andreas Moller, Biyuan Zhang, Yanchi Yu, William Snyderwine, and Frank Guan presented this pertinent election year topic. Enjoy Handcuffs for the Grabbing Hand? [...]

In Perfect Equilibrium in A Bargaining Model, Rubinstein proposes a game in which two individuals are trying to agree on division of a pie in a dynamic setting. Alla Khalitova, Jeff Faris, Lijing Song, and Xiao Qin explain this slightly complicated but very important model well in their notes on Perfect Equilibrium in A Bargaining [...]

George Akerlof and Duke’s own Rachel Kranton first developed the Economics of Identity to explain the explain seemingly irrational decisions made by individuals in an effort to align with a group in which they closely identify. Andreas Moller, William Snyderwine, Biyuan Zhang, Frank Guan, and Yanchi Yu presented the details of  The Economics of Identity [...]

How do you know you are getting a true bargain when purchasing a used item? How do you know whether the person you are interviewing for the job is truly capable rather than a slacker? Liz Malm, Justina Adamanti, Yuqing Hu, and Krishanu Ray discuss adverse selection and quality uncertainty in George Akerlof’s classic theory [...]