This paper documents that when a southern California home gets designated to a wildfire risk zone, its price drops by 11% relative to homes just outside the designation boundary. Whereas the risk designation is discontinuous, the underlying risk is continuous — suggesting the price effect is due to greater risk salience rather than greater risk. Moreover, after a nearby fire, transaction prices of homes with a view of the burn scar drop by 5% relative to the prices of otherwise similar homes — an effect significant only for the first year post-fire and too large to be explained by visual disamenities alone.
Language is critical to coordination in groups. Though, how language affects coordination in groups is not well understood. We prime distributive and integrative language in a bargaining experiment to better understand the links between group outcomes and communication. We accomplish this by priming interests or positions language in randomized groups. We find that priming positions as opposed to interests language leads to agreements where controllers, subjects with unilateral authority over the group outcome, receive a larger share of the benefits but where the total benefits to the group are unaffected. In contrast to common justifications for the use of integrative language in bargaining, our experimental approach revealed no significant differences between priming interests and positions language in regards to increasing joint outcomes for the groups. Across treatments, we find subjects that use gain frames and make reference to visuals aids during bargaining experience larger gains for the group, while loss frames and pro-self language experience larger gains for the individual through side payments. This finding suggests a bargainer's dilemma: whether to employ language that claims a larger share of group's assets or employ language to increase joint gains.
We quantify the externalities associated with unconventional oil and gas development using hedonic valuation. One complication in determining local impacts is that some but not all properties are unified with mineral rights, which enable the residents to financially benefit from drilling, and this information is typically unobserved by researchers. To overcome this issue, we exploit the mineral severance legacy of the homestead act extensions of the twentieth century to identify properties in western Colorado that do not have mineral rights and are therefore only impacted negatively by drilling. We find housing prices decline about 35% when drilling occurs within 1 mile. Treated properties are affected by highly intensive drilling (∼16 wells drilled within a mile, on average), and there is suggestive evidence of nonlinear impacts on a per-well basis. Our estimate of local costs is larger than those found elsewhere in the literature, which demonstrates the critical importance of mineral ownership.
We propose a framework in order to econometrically estimate case-based learning and apply it to empirical data from twelve 2 × 2 mixed strategy equilibria experiments. Case-based learning allows agents to explicitly incorporate information available to the experimental subjects in a simple, compact, and arguably natural way. We compare the estimates of case-based learning to other learning models (reinforcement learning and self-tuned experience weighted attraction learning) while using in-sample and out-of-sample measures. We find evidence that case-based learning explains these data better than the other models based on both in-sample and out-of-sample measures. Additionally, the case-based specification estimates how factors determine the salience of past experiences for the agents. We find that, in constant sum games, opposing players’ behavior is more important than recency and, in non-constant sum games, the reverse is true.
Abstract Cooperative management of shared groundwater resources in the High Plains region of the United States is critical to support sustainable agricultural‐based economies. This research uses a repeat‐sample survey of agricultural producers in the states of Colorado and Nebraska to analyze how seasonal changes and variation in stress and salience influence support for groundwater management. We find that support for groundwater management tends to be lower in the fall, when agricultural producers are engaged in harvest activities. The results also reveal that changes in the salience of commodity prices and water availability can drive changes in support for groundwater management.
This work measures the historical evolution of the value of water power during the Industrial Revolution in the United States. I use the variation in county level agricultural land prices and the natural endowment of water power to identify the value of water power. This value is decomposed into direct values (power as a prime mover) and indirect values (attracting infrastructure) from 1850 to 1920; prior to 1900 approximately 85-90% of the total value is derived from the direct effect of water power. Significant devaluation of water-power endowments occur after 1900, with a significant decline in value by 1920.
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