Department of Economics

This study uses a new dataset combining survey and administrative data to investigate the longitudinal effects of subsidized housing on a broad range of outcomes relating to dependency. Given a household's assistance status in 1996, it examines outcomes over the subsequent three years. The aim is to produce an excellent comparison group by matching on the same variables (measured in an earlier period) as the outcomes to be examined. The main findings are that housing subsidy programs reduce individual earnings by roughly 15% and household size by 5-10%. Although these programs are found to affect neighborhood choice, neighborhood poverty rates explain little of the impact on individual earnings.

Credit default swaps (CDS) played an important role in the financial crisis of 2008 leading to calls for regulation. Here, we seek to understand the impact of a CDS regulation that restricts the possibility to hold naked CDS. We use a controlled laboratory experiment analyzing CDS pricing in a bond market subject to default risk. Our results show that the regulation achieves the goal of increasing the use of CDS for hedging purposes while reducing the use of CDS for speculation. This success does not come at the expense of lower initial public offering (IPO) prices for the bonds or worse pricing of bonds or CDS in the secondary market.

We demonstrate the possibility of conducting synchronous, repeated, multi-game economic decision-making experiments with hundreds of subjects in-person or remotely with live streaming using entirely mobile platforms. Our experiment provides important proof-of-concept that such experiments are not only possible, but yield recognizable results as well as new insights, blurring the line between laboratory and field experiments. Specifically, our findings from 8 different experimental economics games and tasks replicate existing results from traditional laboratory experiments despite the fact that subjects play those games/task in a specific order and regardless of whether the experiment was conducted in person or remotely. We further leverage our large subject population to study the effect of large (N = 100) versus small (N = 10) group sizes on behavior in three of the scalable games that we study. While our results are largely consistent with existing findings for small groups, increases in group size are shown to matter for the robustness of those findings.

Before the parliamentary elections in 2018, the ruling party in Turkey, AKP, introduced a new apparentement provision in the electoral law, which allowed parties to make electoral alliances in order to meet the electoral threshold. We claim that this was an ex post mistake. AKP’s electoral engineering was motivated by their fear that its coalition partner, MHP, would not exceed the 10% threshold. While MHP actually met the threshold in the election, the opposition party, İP, failed to do so. Thanks to the new law, the votes for İP were not wasted, as would have happened under the old law. AKP less than 50% of seats and it consequently lost the parliamentary majority. Under the old electoral law, AKP would have won the majority. We use four alternative scenarios in order to estimate the seats and evaluate the political consequences of the unsuccessful electoral manipulation