Conjoint experiments enjoy increasing popularity in political and social science, but there is a paucity of research on respondents' underlying decision-making processes. We leverage eye-tracking methodology and a conjoint experiment, administered to a subject pool consisting of university students and local community members, to examine how respondents process information when completing conjoint surveys. Our study has two main findings. First, we find a positive correlation between attribute importance measures inferred from the stated choice data and attribute importance measures based on eye movement. This validation test supports the interpretation of common conjoint metrics, such as Average Marginal Component Effects and marginal R^2 values, as valid measures of attribute importance. Second, when we experimentally increase the number of attributes and profiles in the conjoint table, respondents on average view a larger absolute number of cells but a smaller fraction of the total cells displayed, and the patterns in which they search between cells change conditionally. At the same time, however, their stated choices remain remarkably stable. This overall pattern speaks to the robustness of conjoint experiments and is consistent with a bounded rationality mechanism. Respondents can adapt to complexity by selectively incorporating relevant new information to focus on the important attributes, while ignoring less relevant information to reduce the cognitive processing costs. Together, our results have implications for both the design and interpretation of conjoint experiments.

We provide an equilibrium analysis of the efficiency properties of simultaneous bilateral tariff negotiations in a three-country model of international trade. We consider the setting in which discriminatory tariffs are allowed, and we utilize the “Nash-in-Nash” solution concept of Horn and Wolinsky (1988). We allow for a general family of political-economic country welfare functions and assess efficiency relative to these welfare functions. We establish a sense in which the resulting tariffs are inefficient and too low, so that excessive liberalization occurs from the perspective of the three countries.

A growing number of countries have established programs to attract immigrants who can contribute to their economy. Research suggests that an immigrant's initial arrival location plays a key role in shaping their economic success. Yet immigrants currently lack access to personalized information that would help them identify optimal destinations. Instead, they often rely on availability heuristics, which can lead to the selection of sub-optimal landing locations, lower earnings, elevated outmigration rates, and concentration in the most well-known locations. To address this issue and counteract the effects of cognitive biases and limited information, we propose a data-driven decision helper that draws on behavioral insights, administrative data, and machine learning methods to inform immigrants' location decisions. The decision helper provides personalized location recommendations that reflect immigrants' preferences as well as data-driven predictions of the locations where they maximize their expected earnings given their profile. We illustrate the potential impact of our approach using backtests conducted with administrative data that links landing data of recent economic immigrants from Canada's Express Entry system with their earnings retrieved from tax records. Simulations across various scenarios suggest that providing location recommendations to incoming economic immigrants can increase their initial earnings and lead to a mild shift away from the most populous landing destinations. Our approach can be implemented within existing institutional structures at minimal cost, and offers governments an opportunity to harness their administrative data to improve outcomes for economic immigrants.

Dutch-Caribbean plantations attracted substantial outside funding in the 1760s. This came to an abrupt end after the 1773 credit crisis. We use one banker’s detailed archives to analyze how bankers and investors were initially able to overcome asymmetric information problems, and why the system eventually broke down. Bankers oversaw plantations’ cash flows and placed debt with investors in the form of mortgage-backed securities. Strong growth led to lax screening and an oversupply of credit. After a fall in commodity prices, plantation debts were unsustainable. Restructurings were incomplete and debt overhang led to underinvestment and a drop in economic activity.

This paper empirically examines recently declassified tariff bargaining data from the GATT/WTO. Focusing on the Torquay Round (1950–1951), we document stylized facts about these interconnected high-stakes international negotiations that suggest a lack of strategic behavior among the participating governments and an important multilateral element to the bilateral bargains. We suggest that these features can be understood as emerging from a tariff bargaining forum that emphasizes the GATT pillars of MFN and multilateral reciprocity, and we offer evidence that the relaxation of strict bilateral reciprocity facilitated by the GATT multilateral bargaining forum was important to the success of the GATT approach.

The U.S. dollar exchange rate clears the global market for dollar-denominated safe assets. We find that shifts in the demand and supply of safe dollar assets are important drivers of variation in the dollar exchange rate, bond yields, and other global financial variables. An increase in the convenience yield that foreign investors derive from holding safe dollar assets causes the dollar to appreciate, and incentivizes foreign debtors to tilt their issuance towards dollar-denominated instruments. U.S. monetary policy also affects the dollar exchange rate through its impact on the supply of safe dollar assets and the convenience yield. Interest rate spreads with foreign countries are not sufficient statistics to gauge the impact of the stance of U.S. monetary policy on currency markets. The U.S. Treasury basis, which measures the yield on an actual U.S. Treasury minus the yield on an equivalent synthetic U.S. Treasury constructed from a foreign bond, provides a direct measure of the global scarcity of dollar safe assets.

The problem of low naturalization rates in the United States has entered policymakers’ agendas in light of the societal gains associated with citizenship and an increasing number of foreign-born residents. Nevertheless, there is little evidence on what policy interventions work best to increase naturalization rates. In this research, we show that the standardization of the fee waiver for citizenship applications in 2010 raised naturalization rates among low-income immigrants. These gains were particularly sizable among those immigrants who typically face higher hurdles to accessing citizenship. These findings have implications for policymakers interested in designing policies that help disadvantaged immigrant groups overcome barriers to citizenship.