Zach Mazlish on X: "Hard to overstate how revelatory this paper was for me — one takeaway I had from it was "small fixed costs can really deter people from optimizing." Which made me think about a few other recent papers where fixed optimization costs are a key ingredient: https://t.co/Zf1Saa6jmc" / X

Hard to overstate how revelatory this paper was for me — one takeaway I had from it was "small fixed costs can really deter people from optimizing." Which made me think about a few other recent papers where fixed optimization costs are a key ingredient:

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Brian Albrecht

@BrianCAlbrecht

Nov 20

Prospect theory is wrong as a theory of choice between lotteries. And we've already had the evidence for decades! A new paper by Bouchouicha, Oprea, Vieider, and Wu shows how

dropbox.com/scl/fi/y0spy1g

9:14 AM · Dec 9, 2024

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Zach Mazlish

@ZMazlish

Dec 9

1) If you give people cash, many stick to a rule of thumb of "spend/save it all" until the transfer crosses some threshold where re-optimizing becomes worthwhile. => response of the economy to stimulus checks is very sensitive to the size of those checks joelflynn.com/wp-content/upl

2) Default asset allocations in 401(k) plans can have a huge effect on households' stock/bond allocations: typical HH shares of wealth in the stock-market might be ~10-20pp higher if 401(k) defaults were target date funds rather than money market funds

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Tim de Silva

@timdesilva

Jun 2

A

on my NBER WP paper with @TahaChoukhmane

Draft: tinyurl.com/47mt6m2k More details:

3) Arguably, price and wage stickiness is primarily due to fixed re-optimization costs.

@BasilHalperin

shows us that if nominal rigidities are due to fixed costs, something like NGDP targeting is optimal monetary policy (rather than inflation targeting) basilhalperin.com/papers/halperi

4) Two recent papers have fixed costs of wage adjustments, which help rationalize why workers dislike inflation and why workers' real wages fell in the recent inflation episode: x.com/JADHazell/stat nber.org/papers/w33233?

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Joe Hazell

@JADHazell

Sep 18

New paper

Why do people hate inflation? One reason is 𝘄𝗮𝗴𝗲 𝗲𝗿𝗼𝘀𝗶𝗼𝗻 𝗮𝗻𝗱 𝗰𝗼𝗻𝗳𝗹𝗶𝗰𝘁 𝗰𝗼𝘀𝘁𝘀. With awesome coauthors @jptguerreiro, Christina Patterson, @ChenLian92. Paper: jadhazell.github.io/website/draft_ Great companion thread: x.com/otis_reid/stat 1/

For evidence that specifically *optimization* costs lead to fixed costs of price changes: econweb.umd.edu/~stevens/paper The fixed costs of wage change papers describe their costs as “negotiation” costs, but I am inclined to think re-optimization costs are also important.

5) This is pure speculation, but it seems to me that the fixed costs of re-optimizing one's portfolio are also the biggest reason markets are (surprisingly?) "inelastic" cowles.yale.edu/sites/default/

In the original tweet in this thread I referenced the wrong paper — meant to quote tweet this one!

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Brian Albrecht

@BrianCAlbrecht

Nov 22

People were quite interested in the paper on Prospect Theory. Here is another one by Oprea you should know. Behavioral anomalies we attribute to risk (probability weighting, loss aversion) look like responses to complexity, not risk. Forget all the talk about lotteries. x.com/BrianCAlbrecht…

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Philipp Heimberger

@heimbergecon

20h

"Pursuit of top-5 publications has become the obsession of the next generation of economists. However, the T5 screen is far from reliable. A substantial share of influential publications appear in non-T5. Reliance on the T5 to screen talent incentivizes careerism over creativity"

There is a widespread notion that men are more ambitious than women. But this new paper finds no significant gender differences in goal setting or goal pursuit suggesting that gender disparities in outcomes in educational or professional contexts stem from other factors.

All-female-authored papers are less likely to be accepted at economics conferences than all-male papers even when adjusting for... 1. the number of authors on a paper, 2. referees' traits, 3. subfield, 4. # of cites, 5. previous record of the authors, 6. connections

Do coordination failures constrain financial technology adoption? In my paper last month's

@AEAjournals

American Economic Review, I explore this using the Mexican gov's rollout of debit cards to low-income households and look at effects on retailers and other consumers

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AEA Journals

@AEAjournals

Jul 23

Forthcoming in the AER: "Financial Technology Adoption: Network Externalities of Cashless Payments in Mexico" by Sean Higgins. aeaweb.org/articles?id=10

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