ניירות דיון 2023

WP 1-2023

 

Challenging Encounters and Within-Physician Practice Variability

Gabriel Chodick, Yoav Goldstein, Ity Shurtz, Dan Zeltzer

Abstract:

We examine how physician decisions are impacted by difficult cases-encounters with newly diagnosed cancer patients. Using detailed administrative data, we compare primary care physicians' decisions in visits that occurred before and after difficult cases and matched comparison cases by the same physicians on other dates. Immediately following a difficult case, physicians increase referrals for common tests, including diagnostic tests unrelated to cancer. The effect lasts only for about an hour and is not driven by patient selection or schedule disruption. The results highlight difficult encounters as a source of variability in physician practice.

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Published in The Review of Economics and Statistics 1–27, March 15 2023

 

WP 2-2023

 

Matching Auctions

Daniel Fershtman,  Alessandro Pavan

Abstract:

We study platform markets in which agents arrive gradually, experience changes to their preferences over time, and are frequently re-matched. We introduce simple auctions specifically designed for such markets. Upon joining, agents select a status that determines the weight assigned to their future bids. Each match is then assigned a score that depends on the agents' reciprocal bids and status. The matches maximizing the sum of the bilateral scores are implemented. Under certain conditions, such auctions maximize profits, welfare, or a combination of the two. We use the results to shed light on the distortions due to platforms' market power.

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WP 3-2023

The Effect of Privacy on Market Structure and Prices

Daniel Bird and Zvika Neeman

Abstract:

Protection of consumers’ privacy is often motivated by the fear that, without it, consumers may be exploited via personalized pricing. However, personalized pricing seems to be rare in practice. We explain how privacy nevertheless affects prices in search markets through its effect on market structure. If privacy is not protected, then in addition to consumer search, firms may engage in targeted advertising. We show that privacy protection reduces consumer surplus if firms price discriminate between the search and advertising markets. Absent such discrimination, privacy protection may either increase or decrease consumer surplus. We relate our results to the “privacy paradox.”

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WP 4-2023

Machine Learning for Treatment Effect Heterogeneity: Recovering Partial Effects

Elad Guttman, Dor Leventer, Itay Saporta-Eksten, Analia Schlosser

Abstract:

Recent developments in the causal inference literature introduced Machine Learning (ML) algorithms to the analysis of heterogeneous treatment effects. Relying on these methods, various studies examine how treatment effects vary as a function of covariates. We highlight the potential interpretation challenges when one analyzes treatment effect heterogeneity without taking into account correlated covariates, and propose to examine the partial effect of a covariate on the estimated conditional average treatment effect. Our approach introduces the application of Partial Dependence Plots (PDP) and Accumulated Local Effects (ALE) used in the prediction literature, to the analysis of heterogeneous treatment effects.

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WP 5-2023

Learning in the Marriage Market: The Economics of Dating

Yair Antler, Daniel Bird, Daniel Fershtman

Abstract:

We develop a nontransferable utility model of matching with search and learning frictions. Agents search for a partner and, upon meeting, may date – i.e., gradually learn about their compatibility – rather than decide immediately whether to marry. Dating introduces a tradeoff between learning about a specific potential partner and searching for more promising ones. In (steady-state) equilibrium, agents date for longer than is socially optimal and block-segregation fails. Nevertheless, complementarity between agent types is sufficient for a probabilistic form of positive assortative matching. Finally, we show that recent technological advances in matching markets reduce agents’ investment in dating each potential partner.

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WP 6-2023

She who Pays the Piper Calls the Number: Reparations and Gender Differences in Fertility Choice

Moshe Hazan, Shay Tsur

Abstract:

We evaluate the effect of a shift in the balance of control over resources between spouses on fertility. We exploit a quasi-natural experiment in which some Holocaust survivors in Israel began receiving substantial and unexpected reparations starting in 1956, while others began receiving them in the 1990s or later, when their fertility was already completed. We find that households in which only the female was an early recipient of reparations and young, had between one-quarter to one-third fewer children than similar households in which the male was an early recipient. This result is driven solely by a difference in post-1956 fertility, suggesting a causal relationship.

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WP 7-2023

Unintended Consequences: Israel’s Pension Reform and the Dollar-Shekel Exchange Rate

Moshe Hazan, David Weiss, Yaniv Yedid Levi

 

Abstract:

We argue that the pension reform in Israel, implemented during the 2000s, has had unintended consequences for the exchange rate between the US Dollar and the Israeli Shekel. This reform resulted in a significant concentration of wealth managed by a small number of institutional investors (IIs). As the local capital market became relatively small compared to their assets under management, these investors increased their holdings of foreign assets. When institutional investors observe excess returns on their foreign assets, they rebalance their portfolios by reducing their holdings of foreign assets and increasing their investments in domestic assets. This capital flow leads to an appreciation of the domestic currency. By using the S&P 500 as an instrument for the purchase or sale of US dollars (USD) by IIs, we find that a purchase of 1 billion USD results in a depreciation of the Shekel by approximately 2-2.5%. Importantly, this relationship has only emerged in recent years as the wealth managed by institutional investors has grown substantially.

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WP 8-2023

Inclusive Monetary Policy: How Tight Labor Markets Facilitate Broad-Based Employment Growth

 Nittai K. Bergman, David Matsa, and Michael Weber

Abstract:

This paper analyzes the heterogeneous effects of monetary policy on workers with differing levels of labor force attachment. Exploiting variation in labor market tightness across metropolitan areas, we show that the employment of populations with lower labor force attachment—Blacks, high school dropouts, and women—is more responsive to expansionary monetary policy in tighter labor markets. The effect builds up over time and is long lasting. We develop a New Keynesian model with heterogeneous workers that rationalizes these results. The model shows that expansionary monetary shocks lead to larger increases in the employment of less attached workers when the central bank follows an average inflation targeting rule and when the Phillips curve is flatter. These findings suggest that, by tightening labor markets, the Federal Reserve’s recent move from a strict to an average inflation targeting framework especially benefits workers with lower labor force attachment.

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WP 9-2023

 

How to Communicate the Nudge: A Real-World Policy Experiment

Oren Bar-Gill, Alma Cohen

Abstract:

Disclosure-based nudges are increasingly utilized by governments around the world to achieve policy goals related to health, safety, employment, environmen­tal protection, retirement savings, debt, and more. Yet a critical aspect of these nudge-type policy interventions—the mode of communication—remains unex­plored. We study the effects of the communication medium on debt collection procedures, using a policy experiment conducted in cooperation with the Israeli Ministry of Justice. Debtors often lack adequate information about the debt, the judgment, and the enforcement and collection procedures. As a result, the pro­cess of debt collection is often harmful to the debtor and ineffective in securing repayment. We manipulate the choice of medium—telephone, regular mail, text message, and video message—holding fixed the content of the communication. We find that digital communication strategies, in particular, communicating via text message, were the most cost-effective, significantly improving outcomes for both debtors and creditors.

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WP 10-2023

Auctioning Class Action Representation

Alon Klement, Zvika Neeman, Moran Ofir

Abstract:

Class actions feature severe agency problems, resulting from the divergence of interests between class members and the class attorney. This paper proposes a novel mechanism for selecting the class attorney and aligning her interests with those of the represented class. The mechanism applies a combined percentage and hourly litigation fee structure, suggested by Polinsky and Rubinfeld (2003), in which lawyers earn a percentage of the class’ common fund, and bear the same percentage over their time investment.  To guarantee a maximum expected payoff for the class, we supplement this fee structure with a preliminary two stages auction, in which the role of the lawyer is tendered using competitive bidding. We prove that the proposed auction would leave the class with the highest possible net payoff. The percentage taken by the lawyer would be the lowest possible, and the winning lawyer would be the one who produces the highest expected net payoff for the class. We then extend the model to cases where the attorney files the class action is compensated for her pre-filing investment, and to settlements.

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Published in The Journal of Law, Economics, and Organization (2021); ewab014

 

WP 11-2023

A spatial vaccination strategy to reduce the risk of vaccine-resistant variants

Xiyun Zhang , Gabriela Lobinska, Michal Feldman, Eddie Dekel, Martin A. Nowak, Yitzhak Pilpel, Yonatan Pauzner, Baruch Barzel, Ady Pauzner

Abstract:

The COVID-19 pandemic demonstrated that the process of global vaccination against a novel virus can be a prolonged one. Social distancing measures, that are initially adopted to control the pandemic, are gradually relaxed as vaccination progresses and population immunity increases. The result is a prolonged period of high disease prevalence combined with a fitness advantage for vaccine-resistant variants, which together lead to a considerably increased probability for vaccine escape. A spatial vaccination strategy is proposed that has the potential to dramatically reduce this risk. Rather than dispersing the vaccination effort evenly throughout a country, distinct geographic regions of the country are sequentially vaccinated, quickly bringing each to effective herd immunity. Regions with high vaccination rates will then have low infection rates and vice versa. Since people primarily interact within their own region, spatial vaccination reduces the number of encounters between infected individuals (the source of mutations) and vaccinated individuals (who facilitate the spread of vaccine-resistant strains). Thus, spatial vaccination may help mitigate the global risk of vaccine-resistant variants.

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Published in PLOS Computational Biology, August 10, 2022 [https://doi.org/10.1371/journal.pcbi.1010391]

 

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