Economics
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Item Accounting for Information: Case Studies in Editorial Decisions and Mortgage Markets(2014) Bandeh-Ahmadi, Ayeh; Rust, John; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)I measure information on distinct facets of quality from a corpus of reviews and characterize how decision-makers integrate this information present in text with that available through other channels. Specifically, I demonstrate that referee comments at a scholarly journal contain information on submissions' future citation impact above and beyond information available in referee scores. I measure this signal on future citation impact and show that it does not enter into editorial decision-making directly but rather through an interaction that amplifies the information content of referee scores: the more citations a low- or mediocre-scoring paper is likely to get the less likely it is to be published. Secondly, I describe referee comments that are highly predictive of greater citations. Papers that referees say have access to unique datasets, or are written on topics of relevance to ongoing debates or government applications receive greater citations on average. Third, I show the appearance of favoritism amongst editors who accept a higher share of papers that cite themselves is partly a reflection of an ability to draw and select for papers that receive more citations. Finally, I characterize budget constraints on publication space and referee capital and provide some guidance on what types of information editorial systems could capture to promote transparency in future analyses while protecting privacy of authors or referees. A second chapter introduces a theoretical framework for assessing the empirical discussion of asymmetric information amongst mortgage lenders and adds the idea of lender competition into this framework.Item Essays on Information Contagion and Media of Exchange(2013) McArthur, David; Rust, John; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)CHAPTER 1: INFORMATION CONTAGION In social media, information spreads like a contagion from person to person. When many pieces of information are spreading and competing in the space of social media messages, their propagation rates become very unequal. This is because contagion creates a positive feedback which amplifies small, random differences in prevalence. A framework for modeling social media is developed that suggests how to infer the communication choices of social media participants from the observed heavy-tailed count distribution of messages containing different pieces of information. In a Monte Carlo simulation where agents with rational expectations make individually optimal communication choices, the feedback effect is only partially mitigated. Even with fully rational behavior, information that no-one has an especially high propensity to pass along can "go viral". CHAPTER 2: SEARCH AND BARGAINING WITH PLASTIC: MONEY AND CHARGE CARDS AS COMPETING MEDIA OF EXCHANGE Charge cards are introduced into the Lagos-Wright money search model as an alternative medium of exchange competing with money. I explore why cards and money may coexist, and examine the implications of intermediated exchange for monetary policy. Charge cards lower the social cost of inflation because they overcome the hold up problem with money that otherwise results in too little exchange. Some inflation can even be beneficial if a higher cost of holding money pushes agents to become cardholders. Moreover, higher nominal interest rates help card companies set higher spending limits, which can also increase the level of exchange and improve welfare.