New AEA Journals
| Lasse Lien |
The AEA has recently introduced no less than four new journals. AEJ: Microeconomics, AEJ: Macroeconomics, AEJ: Applied Economics and AEJ: Economic Policy. I’m sure all four will all be great journals, but judging from the first issue, I think AEJ: Microeconomics will be my favorite. Here are two examples why:
Reputational Incentives for Restaurant Hygiene
Ginger Zhe Jin and Phillip Leslie
How can consumers be assured that firms will endeavor to provide good quality when quality is unobservable prior to purchase? We test the hypothesis that reputational incentives are effective at causing restaurants to maintain good hygiene quality. We find that chain affiliation provides reputational incentives and franchised units tend to free-ride on chain reputation. We also show that regional variation in the degree of repeat customers affects the strength of reputational incentives for good hygiene at both chain and nonchain restaurants. Despite these incentives, a policy intervention in the form of posted hygiene grade cards causes significant improvements in restaurant hygiene.
The Geography of Trade in Online Transactions: Evidence from eBay and MercadoLibre
Ali Hortaçsu, F. Asís Martínez-Jerez and Jason Douglas
We analyze geographic patterns of trade between individuals using transactions data from eBay and MercadoLibre, two large online auction sites. We find that distance continues to be an important deterrent to trade between geographically separated buyers and sellers, though to a lesser extent than has been observed in studies of non-Internet commerce between business counterparties. We also find a strong “home bias” for trading with counterparties located in the same city. Further analyses suggest that location-specific goods such as opera tickets, cultural factors, and the possibility of direct contract enforcement in case of breach may be the main reasons behind the same-city bias.