scholarly journals Challenges to the Conventional Wisdom About Mergers and Consumer Welfare in a Converging Internet Marketplace

2020 ◽  
Author(s):  
Rob Frieden
Author(s):  
Dawn Langan Teele

In the 1880s, women were barred from voting in all national-level elections, but by 1920 they were going to the polls in nearly thirty countries. What caused this massive change? Contrary to conventional wisdom, it was not because of progressive ideas about women or suffragists' pluck. In most countries, elected politicians fiercely resisted enfranchising women, preferring to extend such rights only when it seemed electorally prudent and necessary to do so. This book demonstrates that the formation of a broad movement across social divides, and strategic alliances with political parties in competitive electoral conditions, provided the leverage that ultimately transformed women into voters. As the book shows, in competitive environments, politicians had incentives to seek out new sources of electoral influence. A broad-based suffrage movement could reinforce those incentives by providing information about women's preferences, and an infrastructure with which to mobilize future female voters. At the same time that politicians wanted to enfranchise women who were likely to support their party, suffragists also wanted to enfranchise women whose political preferences were similar to theirs. In contexts where political rifts were too deep, suffragists who were in favor of the vote in principle mobilized against their own political emancipation. Exploring tensions between elected leaders and suffragists and the uncertainty surrounding women as an electoral group, the book sheds new light on the strategic reasons behind women's enfranchisement.


2020 ◽  
Author(s):  
Jose Maria Barrero

This paper studies how biases in managerial beliefs affect managerial decisions, firm performance, and the macroeconomy. Using a new survey of US managers I establish three facts. (1) Managers are not over-optimistic: sales growth forecasts on average do not exceed realizations. (2) Managers are overprecise (overconfident): they underestimate future sales growth volatility. (3) Managers overextrapolate: their forecasts are too optimistic after positive shocks and too pessimistic after negative shocks. To quantify the implications of these facts, I estimate a dynamic general equilibrium model in which managers of heterogeneous firms use a subjective beliefs process to make forward-looking hiring decisions. Overprecision and overextrapolation lead managers to overreact to firm-level shocks and overspend on adjustment costs, destroying 2.1 percent of the typical firm’s value. Pervasive overreaction leads to excess volatility and reallocation, lowering consumer welfare by 0.5 to 2.3 percent relative to the rational expectations equilibrium. These findings suggest overreaction may amplify asset-price and business cycle fluctuations.


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