[email protected]/.../takakofg/coeconfpapers/yannelis.pdfo]y i5uj sv uje v yjkfm @ mlu...

29

Upload: others

Post on 02-Nov-2020

2 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

�������������� ������������������������������� !#"$�%�&���� '(��)*" +��-,. �/)��0���

132$45�&�� �6)����&2 ��2�7 � 89�&2:)���2.���� �;4<+�=;��2:)���>

?A@

BDCFEHGJILKNMLODP/QSRTMLUSUJV�KWCFO

X%V�YJMLZ�[]\^V�U_[`Iba*c�E�ILUJI5\&CFE�O

d�UJCfe5V�Z]O]Cf[ @ ILa-ghKFKWCFUJI5CWOiMb[DdDZ ? MbUjMlkmPnGJML\^YJMLCFo5U

PnGJML\^YJMLCFo5UqpSgsrutSv�wAxLy

V�\^MLCWK{z|U @ MLUJUJV�KFC~}%�JCW�JELQ�V��S�

� E�[�I ? V�Z�p�xLy5yA�

�:�-�������j�L� z|��V%YJZ�I�e�CW�JV�O]V�e5V�Z�MLK��JCf�qV�Z]V�U_[io5V�UJV�Z�MLKWCF��Mb[�CWI5UJO�ILa-X%V ? Z�V�����O�O]I�E�CFMLK�V��_�JCFKWC ? Z�CF�J\�[]GJV�I5Z�V�\

?A@ MLKFKWI��`CFUJo�a�ILZ�MLO @ \&\^V�[�Z]CWE�CFUSa�ILZ]\^Mb[�CWI5U MLUJ�¡M¢E�I5UA[]CFU_�J�J\ Iba£MLo5V�UA[�O�Q¥¤�GJV¦Z]V�O]�JKf[�O.UJIL[�I5USK @

V�§�[]V�UJ��[�GSV�I5UJV�O�CWU�¨�CF\£k{RTMLUSUJV�KWCFO�©mv�ªLªA«5¬�p ? �S[�MLKFO�I�UJV��¡[�GSV�I5Z�V�\&O�MLZ]V/I ? [HMbCFUJV��:�`GJCFEHG�MLKWKFI�� a�I5ZnM

E�ILU_eLV�§�CWa @ CWUJo�V���V�E�[0I5U;MLo5o5Z�V�oAMl[�CFILU�Q3¤�GJV�KNMb[�[�V�Z|CFO|MLEHGJCWV�e5V�� ?_@ CF\&Y�ILO]CFUSoD[]GJV�MLO�O]�J\&YS[�CWI5U£ILaT­�\^MLU @

\&I5Z]V®MLoLV�UA[�O�[�GJMLU¯Om[�Z]Mb[�V�o5CFV�O]°¯©²±`�JO�[]CFEHGJCWUJCfk²RTMLUJUJV�KFCWO�©mv�ª5ªSv�¬iMLUS�.¤³I5�JZ�´ @ k²RTMLUJUJV�KFCWOµ©²xLy5ySv�¬]¬�Q

¶m·�¸*¹{º�»3¼i»m¼i¸�½²¾0¸�¿AÀ|»�½{Á�½{ÂnÃ-»mÄ�½{»mÅ_ÆJÇ�È�½{»mÉËÊ˼nÊËÌlÁ�½²¾�Â�½{ÁͿιÐÏqÁ�ÑJÈ�½²»]ÑÒ»�Ì�¹²»�ÂTÊËÌiÓjÁ�½²ÊÔÑ�ÕÍÊÖÌ�dzÈ�½²ÊËÉ�¸�¿A×�Ø�Ø�Ù�Æ�ÚSÄb»�Ì�»sÛl¹Ò¹²»]¿ܽ{¸�¼u¹²ºl»0Â�ÊËÑ{ÝsÅbѲѲÊÖ¸�Ì_Õ�Ýs¸�¼n¼i»�Ì�¹ÞÑ�ÁÍÌlÂ/ß�Å�»�ÑÒ¹²Ê˸�ÌlÑq¸�¿�àн{ÊÖá`â�Á�ÉËÂ�»�½�Õ�ã�»�Á�Ì�äNå6ÁͽÞݳâq¸�Ì�ÌlÊËÑ{ÑÒ»�Å_Õ�âq»m½{ÌlÁͽÞÂ�æ�¸�½{Ì�»m¹�Á�ÌlÂ�çSÊËÉÖÊËÈL»å®Á�½Ò¹{ÊÖÌlÑ�Ã|ÁHä~è�¸�ÝÞºlÁlÆ

Page 2: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

� 132�)*����7����`)*���&2

X%V ? Z]V���©mv�ªA�5x5¬nCWU_[]Z]I��J�JE�V���[�GJV6CF�JV�M£ILa*M;O]I�E�CFMLK�O @ Om[�V�\ ©�I5Z`M ? Om[�Z]MLE�[�V�E�I5UJI5\ @ M&o5V�UJV�Z]MLKFCW��Mb[]CFI5U ILa

B/MbO]G���O��Îv�ªA�LySpÐv�ª5��v���UJI5Z�\ MLKJa�ILZ]\#oAML\&V�¬�¬�MbUJ� YJZ�I�e5V��:[]GJV/Vͧ�CFO�[]V�UJE�V%ILa3MbU:V��_�JCWKFC ? Z]CF�S\ a�I5ZTM O�I�E�CNMLK

O @ Om[�V�\.Q�¤�GJCWOTZ�V�O]�SKW[��iMLO�[�GJVD\^MLCFU;\^Mb[�GJV�\ Ml[�CFE�MLKS[]I�I5Kj�SO]V��^[�IµYSZ]I�e5VD[�GJVDV�§�CFOm[�V�UJE�V%Iba�M6��MLKWZ�MLO�CNMLU

V��_�JCWKFC ? Z]CW�J\¥a�ILZ`M;E�I5UJE�Z]V�[]V V�E�I5USI5\ @�?A@�� Z]Z]I���MLUJ�¯X%V ? Z�V���©mv�ªA���_¬�Q

¤�GJV�YJ�JZ�Y�ILO]V�ILa�[]GJCFO�YJMLY�V�Z�CFO6[h�nIba�I5KF��Q-CFZ]Om[�p|[]I�o5V�USV�Z�MbKFCF��V^[]GJV:CF�SV�M$ILaDM$O�I�E�CNMLK�O @ O�[]V�\ ?A@

CFUA[]Z]I��J�JE�CWUJo MLO @ \^\&V�[]Z]CFE¯CFUSa�ILZ]\^Mb[�CWI5U�p�MLUS��MuE�I5UA[�CWU_�J�J\ IbaµMbo5V�UA[�O�Q���V�E�I5US��pD[]I YJZ]I�eLV O�V�eLV�Z�MbK

V�§�CWO�[�V�UJE�V�ILaqMLU^V��_�JCFKWC ? Z�CF�J\ [�GJV�I5Z]V�\^O�a�I5Z�M�O]I�E�CFMLKjO @ O�[]V�\#�`CW[]G MbO @ \^\&V�[]Z]CWE�CFUSa�I5Z�\ Ml[�CFILU£MLUJ�;�`CW[]G

M£E�I5UA[]CFU_�J�J\ ILa|MLo5V�UA[�O�Q

� �JZ� jZ�O�[ [�GJV�I5Z]V�\ Vͧ�[]V�UJ�SO£O]V�eLV�Z]MLKn´_UJI��`U Z]V�O]�JKf[�O�Q�|CWZ]O�[�p|Cf[µVͧ�[]V�UJ�SOµ[�GJV���EHGJ\&V�CF�SKFV�Z ©mv�ªA«�v�¬

[�GSV�I5Z�V�\ [�I MLKWKFI�� a�I5Z MLO @ \&\^V�[�Z�CFE.CFUSa�I5Z�\ Ml[�CFILU�Q���V�E�I5UJ��p`CW[ V�§�[�V�UJ�JO:[]GJV�¨�CF\£k{RTMLUSUJV�KWCFO.©mv�ª5ªA«5¬

MLUJ���iMLKW�JV�Z^©{xby5ySv�¬/VͧSCWO�[]V�UJE�V Z]V�O]�JKf[�O®a�Z]I5\ M��iM @ V�O]CFMLU�UJILZ]\^MLK*a�I5Z]\ oAML\&V;�`Cf[�G�M¯E�I5UA[�CFU_�J�S\�ILa

YJKFM @ V�Z�O®[]I�M�O]I�E�CNMbK��iM @ V�O]CFMLU¦O @ O�[]V�\(�`CW[]G M:E�I5UA[�CWU_�J�J\(ILaTMLoLV�UA[�O�Q�j�JZ�[]GJV�Z�\^I5Z�VLp�Cf[%V�§�[]V�UJ�JO®[�GSV

�iM @ V�O]CFMLU O�I�E�CNMLK�V��_�JCFKWC ? Z�CF�J\9V�§�CFOm[�V�USE�V®[�GJV�I5Z]V�\ ILa-RTMLUSUJV�KWCFO6©{xby5yAx5¬na�Z]IL\ M� jUJCW[]V®O]V�[�ILa*MLo5V�UA[]OD[]I

M£E�I5UA[]CFU_�J�J\ I5USVLQ

� �JZ0O]V�E�I5UJ�&[�GJV�I5Z]V�\#CFO�O]CW\^CWKNMLZ-CFU;O]YSCFZ]Cf[*�`CW[]G^IL�JZ� jZ]Om[TILUJVLp ? �S[�Cf[0�JI�V�O]U�� [�Z]V����SCFZ]V`[�GSV�MbO]O]�S\^Y�k

[�CWI5U ILa�E�ILUJE�M�e�CW[ @ ILai[]GJV ��[�CFKWCW[ @ a��JUJE�[]CFI5UqQ���I��nV�e5V�Z�p�[�GJV&V�§�[]V�Z]UJMLKFCf[�CFV�O�p³C{Q�VLQfp-[]GJV Om[�Z�Ml[�V�oLCFV�O6ILa`MbKFK

IL[]GJV�Z-YJKNM @ V�Z*Mb��V�E�[�CWUJo�[]GJVn�S[]CFKWCW[ @ IbaÐM/YJKFM @ V�Z�p5MLZ�Vn\&I��JV�KFV���MLO-MLU�CWU_[]V�o5Z]MLK_Z�Mb[]GJV�Z³[�GjMbU�MLO|M�YJZ�I��J�SE�[�p

MLO-CW[-CFO-[]GJVnE�MLO]VnCFUµIL�JZ� jZ�O�[-[�GJV�I5Z]V�\¯Q-¤�GJCFO|MLYJYJZ�IAMLEHG;MLKWKFI��`O³a�ILZ|M/E�I5UAe5VͧSCfa @ CFUJo%V��qV�E�[�Q�jI5Z|M ? O�[]Z�MLE�[

V�E�I5UJI5\&CFV�OµI5Z O]I�E�CFMLKTO @ O�[�V�\^O �`CW[�GSI5�S[£MbO @ \^\&V�[]Z]CWE CFU�a�I5Z]\^Mb[�CWI5U�[�GJCWO [ @ Y�V:ILa`E�ILU_eLV�§�CWa @ CWUJo�V���V�E�[

x

Page 3: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

�nMLO�CWUA[�Z]I��J�JE�V�� ?A@ �/MLKWKFV�Z�©mv�ª5ª��A¬�p3©�O]V�VµMLKWO]I&X�Mlkh±DI�EHGjM;MLUJ�.¤-ILYJ�J���u©{xLyLyA�5¬]¬ÍQ�gÞ[DO]GJI5�SKF� ? V®UJIL[]V���p

[�GJMb[;O]CWUJE�V:�TV��nI5Z�´��`CW[]G MLU¢CFU jUSCW[�V �JCF\&V�UJO�CFI5UJMLKnOm[�Z�Ml[�V�o @ O]YJMLE�V�[�GSV¯r @ MLYJ�JUJI�e []GJV�I5Z�V�\�aÒMLCFKWO�Q

¤�G_�JO�p��nV�CF\&Y�ILO]Vi[�GSV/MLO�O]�J\&YS[]CFI5U&ILa`­m\ MLU @ \&I5Z]VDMLoLV�UA[�O0[�GjMbU O�[]Z�Mb[]V�o5CWV�O�°6�`GJCWEHG�MLO�O]�JZ�V�OT[]GjMb[0[�GSV

r @ MLYS�JUJI�e�[�GJV�I5Z]V�\(O�[]CFKWK-GJILKF�JO&©�O]V�V&±`�JO�[]CFEHGJCWUJCfk²RTMLUJUJV�KFCWO£©mv�ª5ªSv�¬/MbUJ�¦¤-I5�SZ]´ @ k{RTMLUJUSV�KFCWO&©{xLyLySv�¬Da�I5Z

M �JV�[HMLCWKFV��uMLUjMbK @ O]CWO ILan[�GJV:CW�JV�M.ILa�\^MLU @ \^I5Z�V Mbo5V�UA[�O [�GjMLU�E�I5\&\^I��JCf[�CFV�OH¬ÍQ�¤�GJCFOµMLO]O��J\^Y�[�CFILU�CFO

I ? e�CFI5�SO]K @ O]Mb[�CWO jV�� �`GJV�UJV�eLV�Z%[�GSVµO�[]Z�Mb[]V�o @ O�YjMLE�V�CFO jUJCf[�V6�JCF\&V�UJO�CFI5UJMLK3MLUJ�.[�GJV�Z]VµCWO/M&E�I5UA[]CFU_�J�J\

ILa|MLo5V�U_[]O�Q

¤�GJV jZ]Om[ [h�TI¯[]GJV�I5Z�V�\&O6MLZ]V;YJZ�I�eLV���a�ILZ®M �iM @ V�O]CFMLU��SV�E�CWO]CWI5U�\^ML´_CFUSo:a�Z�ML\&V��TI5Z]´Ðp³C{Q�VLQfp³MLo5V�UA[]O

\^Ml§�CF\&CF��V&CFUA[]V�Z]CW\ V�§�Y�V�E�[]V�� �S[�CWKFCW[ @ MbUJ�¢�JY��JMb[�V []GJV�CWZ�YJZ�CFI5Z�O�Q$��V�MLKFO�I$YJZ]I�e�CF�SV�E�I5�JUA[]V�Z]YJMLZ�[]O£ILa

[�GSV� jZ�O�[%[h�TI [�GSV�I5Z�V�\&O/a�I5Z`[�GJV E�MLO�V�ILa0V�§ MLUA[]V�V�§�Y�V�E�[]V��¦�S[]CFKFCf[ @ \^Ml§�CF\&CF��CWUJo ? V�GjM�e�CFI5�SZ�Q |CFUjMbKFK @ p

�TV YJZ�I�e�CW�JV M;YS�JZ]C jE�Mb[]CFI5U�Z�V�O]�SKW[�pÐC²QÖVbQWpJ[]GJV®O�[�Z]Mb[�V�o @ O]V�[�ODUJV�V�� UJIb[ ? V6E�I5UAe5Vͧ MLUJ��[�GJV6V��_�JCWKFC ? Z]CF�S\

[�GSV�I5Z�V�\ CWO�I ? [HMbCFUJV��.CWU�[�V�Z�\^O`ILa³[�GSV6Vͧ�[�Z]V�\^V®Y�I5CFUA[]O�ILa-[]GJV®E�I5\&YjMLE�[�pjE�I5UAe5V�§.O�V�[�ILa-O�[�Z]Mb[�V�o5CFV�O�Q

gÞ[�O]GJI5�SKF� ? V�\&V�UA[�CWI5UJV��&[]GjMb[0Z]V�E�V�U_[]K @ �iMbKF�JV�ZD©{xLy5y �_¬*MLUJ�^PnI5Z�UJV�[mkh¤³I5YJ�J����©�a�ILZ�[�GSE�I5\&CFUJo6¬|GJM�eLV

V�§�[]V�UJ�JV��:[�GJV � �S\ MLUSU�©mv�ª5t �_¬|��MLKFZ]MLO]CFMLU;V��_�JCFKWC ? Z�CF�J\ V�§�CFOm[�V�UJE�V/[]GJV�ILZ]V�\#[]IµMLKWKFI�� a�ILZ�CWUA[�V�Z��JV�Y�V�U�k

�JV�U_[0YSZ]V�a�V�Z]V�UJE�V�O�Q � �JZ*O�I�E�CNMLK_V��_�JCWKFC ? Z]CW�J\ V�§�CFOm[�V�UJE�Vi[]GJV�I5Z�V�\&O|�`CW[]G£MLO @ \&\&V�[�Z�CFETCFUSa�I5Z�\ Ml[�CFILU6E�I5�JKW�

? V��JO�V�� []IµVͧ�[]V�UJ�^[�GJVDZ]V�E�V�UA[n�JV�[]V�Z]\&CFUSCFO�[]CFE�Z�V�O]�SKW[�OTILa �nMLKF�JV�Z�MLUJ��PnILZ]UJV�[�kh¤³I5YJ�S��� ?A@ MLKFKWI��`CFUJo%a�I5Z

MLO @ \&\&V�[�Z�CFE�CWUSa�I5Z]\^Mb[]CFI5U�Q

¤�GJV�\^Mb[�GJV�\ Ml[�CFE�Oµ�JO�V��¢CFU�[�GJCWOµYjMLY�V�ZµCFO�Z]Mb[�GJV�Z��JCfe5V�Z�O]VbQ ��V:V�\&YJKWI @ O�V�e5V�Z�MLK�Z�V�O��JKW[]O�I5Uu[�GSV

E�ILU_[]CFU_�JCf[ @ MLUS�£\^V�MLO]�JZ]M ? CWKFCW[ @ Ibaj[�GJV�O�V�[�ILa�CWU_[]V�o5Z]M ? KWVnO]V�KFV�E�[�CWI5UJO|a�Z�I5\ M �iMLUjMbEHG�kÞebMLKW�JV��£E�I5Z]Z�V�O]Y�I5U�k

�JV�UJE�V�MbO-�TV�KFK�MLO-Z]V�O]�JKf[�O|ILU [�GSVnO]V�\^CWE�I5UA[]CFU_�JCW[ @ IbaJ[�GJVTCFUA[�V�o5Z�MbK�IbaÐM �iMbUjMLEHG�k{eLMbKF�JV��µE�ILZ]Z]V�O]Y�I5UJ�JV�UJE�VbQ

j�JZ�[]GJV�Z�\^ILZ]VLpSO]I5\&V�E�I5\&YjMLE�[�UJV�O]O�MLUJ�.E�I5UAeLV�§�CW[ @ Z�V�O]�SKW[�O�a�I5Zi[]GJV®CFUA[�V�o5Z�MbK�ILa �iMLUjMLEHG�kÞebMLKF�SV��.E�I5Z�Z]V�k

Page 4: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

O]Y�I5UJ�SV�UJE�V YJKFM @ MLU�CF\&Y�ILZ�[HMbU_[iZ]I5KWVLQ

¤�GJV�YjMLY�V�Z�CFO�ILZ]oAMLUSCF��V��6MLO�a�I5KFKWI��`O�z�¤�GJV0UJVͧ�[³O�V�E�[]CFI5U6E�ILU_[�MLCFUSO��JV jUSCW[�CWI5UJO�Q���V�E�[]CFI5U ��CFUA[�Z�I��S�JE�V�O

[�GSV¯\&I��SV�K{p�C{Q�VLQfpn[]GJV¯O�I�E�CNMLK�O @ O�[�V�\ �`Cf[�GMLO @ \&\^V�[�Z�CFE�CFUSa�ILZ]\^Mb[�CWI5U¢MLUJ�M�E�I5UA[�CFU_�J�S\ Iba�MLo5V�UA[�O�Q

��V�E�[�CWI5U ��E�ILU_[�MLCFUSO�V�§�CFOm[�V�UJE�V�Z]V�O]�JKf[�O�a�I5Z CFUA[�V�Z]CW\ VͧSY�V�E�[�V���S[]CFKWCW[ @ a��JUJE�[�CWI5UJO�© �iM @ V�O�CNMLU¢�JV�E�CWO]CFILU

\^ML´_CFUJo_¬�MLUJ����V�E�[�CFILUu��E�I5UA[�MLCFUJO®O�CF\&CFKNMbZ/Z]V�O]�JKf[�O�a�I5Z�Vͧ�MLUA[�V;V�§�Y�V�E�[]V��u��[�CFKWCW[ @ a��JUJE�[�CFILU�Q |CFUjMbKFK @ p

��V�E�[�CWI5U t�E�I5UA[HMbCFUJO6M�YJ�JZ�C jE�Mb[�CWI5U�Z]V�O]�JKf[6MLUJ�¦O]I5\&V£E�ILUJE�KW�J�JCFUSo.Z�V�\^MLZ]´_O6MLUJ�¦I5Y�V�U¦�_�JV�O�[�CWI5UJO MLZ]V

CFU ��V�E�[]CFI5U¯«�Q ��V�e5V�Z�MLK�\^Mb[�GSV�\^Mb[�CWE�MLK�Z]V�O��JKW[]O��JO]V�� CWU:[�GJV®YjMLY�V�Z`MbZ]V®E�I5KWKFV�E�[�V���CFU�[�GSV � YJY�V�UJ�SCf§�a�I5Z

[�GSV6E�I5UAe5V�UJCFV�UJE�V ILa-[]GJV®Z]V�ML�JV�Z�Q

� ����� 2���)*���&2��

r�V�[�� MbUJ��� ? V6O]V�[�O�QDx���JV�USIL[�V�O�[�GSV O�V�[%Iba�MLKWK�UJI5UJV�\^YS[ @ O�� ? O�V�[�O/ILa|[]GJV O�V�[�µQ � �JV�USIL[�V�O�[�GSV

O]V�[�ILa�Z�V�MLK-U_�J\ ? V�Z]O�Q%¤�GJV��������������;ILa�M E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�V���z���� x! CWOD[]GJV�O�V�[����#"%$�©'&)(+*S¬�,

� -.� z */,0�|©1&�¬32540gÞa6� MbUJ�7� MLZ]V�[�I5Y�I5KWI5o5CFE�MLKiO�YjMLE�V�O�p�� z8� � x CFO&O�MLCW�[�I ? V:9<;!= >��3?

@ >�A#BDCE;!F�GHB1F�IJ;!I @ ©ÒK{Q�O�Q�E�¬iCfa³[]GJV®O]V�[K$L&M,M��zN�|©1&�¬POMQSR"UTV2µCWO�I5Y�V�U.CFUW� a�I5Z�V�eLV�Z @ ILY�V�U.O�� ? O�V�[XQ

ILaY��Z)��z��[� x CWO/O]MLCF� []I ? VWI\�]��>��3? @ >�A#BDCE;!F�GHB1F�IJ;!I @ ©���QÖO�QÖE�¬�CWa|[�GJV�O�V�[^$L&_,_� zJ�|©1&�¬X`aQ�2;CFO

I5Y�V�U�CWUW��a�I5ZiV�eLV�Z @ I5Y�V�U�O]� ? O]V�[XQ Ibab��ZJ� zc�d� x CWOiO�MLCW�:[�I ? VeCE;!F�GHB1F�IJ;!I @ CWa3CW[iCFOn�qQÖO�QÖEbQnMLUS�

K{Q�O�Q�ELQ

gÞaT©'�M(Ef*¬0MLUJ�¦©H�Y(hg|¬0MLZ�V/\&V�MLO��JZ�M ? KFVDO]YjMLE�V�O`MLUS�i�$zc�d� x CWOnM6E�I5Z�Z]V�O�Y�ILUJ�JV�USE�VLpj��CFOTO�MLCW�^[]I

GjM�e5V`M^Ak>h� @ IN���]lm9<>Y���������DCWaj��� ? V�KFI5UJoLO|[�I%[]GJViYJZ�I��J�SE�[on�khMLKFoLV ? Z]MXp)qWgY4l��ViMLZ]ViIba~[�V�U£CWUA[�V�Z�V�Om[�V��;CWU

[�GSV%O]Cf[��jMb[]CFI5U^�`GJV�Z�V&©'��(+f*¬TCWOiM�\&V�MLO��JZ�M ? KFV/O�YjMLE�VLpJ� CWOiMµ[�ILY�I5KWI5o5CWE�MLKjO�YjMLE�V®MbUJ�igr"sgT©H��¬TCWOT[�GSV

Page 5: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

�nI5Z�V�K�n�khMLKFoLV ? Z]M/ILa �^Q�jI5Z0M�E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V��^a�Z]IL\�M�\^V�MLO]�SZ�M ? KWV�O]YjMbE�V`CFUA[�I6M%[�ILY�I5KWI5o5CWE�MLK_O]YJMLE�Vbp

CWa��nV�O�M @ [�GjMl[ ��GjMLOTM \&V�MLO��JZ�M ? KFV`o5Z]MLYJG�p�CW[�CFO��JUJ�SV�Z]Om[�I�I��&[�GjMl[T[]GJV�[]I5Y�ILKFI5o5CWE�MLK�O]YjMbE�V/CWOTV�UJ�JI��TV��

�`CW[]G¯Cf[�O �nI5Z�V�K)n�khMLKFo5V ? Z�M�QTghU.[�GJV O�ML\&V®O]V�[�[�CWUJo MbO/M ? I�e5Vbp�C²QÖVbQWp-©'�M(Ef*¬ÍpÐM^\&V�MLO��JZ�M ? KFV®O]YJMLE�VµMLUJ� �

M&[]I5Y�I5KFI5oLCFE�MbKqO]YJMLE�VbpP�$CFODO�MLCW�.[]I ? Ve9<;!= >��KAk>h� @ IN�h�]lm9<>iCWa $L&r,:� z��|©1&�¬)O Q R" TV2�,_fua�I5ZDV�eLV�Z @

Q I5Y�V�U CWUW�^Q|gÞ[Ta�I5KWKFI��`O�a�Z]I5\ [�GJV�YJZ]I � V�E�[]CFI5U&[�GJV�I5Z]V�\�[�GjMb[TCWa�M6E�I5Z]Z�V�O�Y�I5US�JV�UJE�V%GjMLOnM6\&V�MbO]�JZ]M ? KFV

o5Z]MLYJG�[�GJV�U¯Cf[`CFODMLKFO�I;KFI��nV�Z`\^V�MLO]�JZ]M ? KWVLQ�¤�GJV6Z]V�e5V�Z�O]V CFODMLKFO�I£[�Z]�SV6Cfa-[]GJV®E�I5Z�Z]V�O]Y�I5UJ�JV�UJE�V CFO�E�KWI5O]V��

ebMLKF�SV���Q

r�V�[ ©�� (���(��3¬ ? V.M jUSCW[�V�\&V�MbO]�JZ�V.O�YjMLE�V MLUS� � ? V¯M �iMLUJMLEHGO�YjMLE�VLQ ÐILZ�v�� ��� p0�TV

�JV�UJIL[�V ?_@���� ©�� (�� ¬`[]GJVµO�YjMLE�V£Iba0V��_�JCWebMLKWV�UJE�VµE�KNMLO�O]V�O/ILao� kÞebMLKW�JV�� �nI�EHGJUJV�Z/CFUA[�V�o5Z�M ? KFV a��SUJE�[]CFI5UJO&$z�� � ��UJI5Z�\^V�� ?_@

� & � � "�©���� � &-©���¬ � ��� �0©���¬�¬ ��! � 4gÞ[�CWO�M�O�[�MLUJ�jMLZ���Z]V�O]�JKf[i[�GjMl[�UJI5Z�\^V�� ?_@ [�GJV�a��JUJE�[]CFI5UJMLK �#"�� � M ? I�eLVLp ��� ©�� (�� ¬ ? V�E�I5\^V�O�M��iMLUJMLEHGO]YJMLE�V�� O�V�V�X%CFV�Om[�V�KfksdDGJK³©mv�ªA«5«5¬ÍpAY�QÔ�by �{Q-��VD�JV�USIL[�V ?A@%$ �� [�GJV @ >�G ;'&���919 @ >�9<>EC�G BD;!F @ &3�+;!A � z�� � x)([�GJMb[ ? V�KFI5USo;[]I£[�GJV®O]YJMLE�V ��� ©�� (h�¦¬�pJC²QÖVbQWp

$ �� " $L&M, ��� ©�� (�� ¬nzc&-©���¬8,r�-©���¬*�,+ pJ4.-c4 254��Vµ�`CFKWK-MbKFO]I E�I5UJO�CF�JV�Z/[�GSV�O]V�[ $ �� "0$L&_, � � ©�� (�� ¬/z &-©���¬X, �|©���¬%��+.pJ4.-c4 25(qC{Q�VLQfp $ �� CWO�[�GSV @ >�G�;'&��9190/X;LCE�NF >��KB1F�G >D�����]lm9<> @ >�9<>EC�G BD;!F @ &3�+;!A0�-© " ¬�4�±DV�E�MLKWK�[�GjMb[D[�GSVµE�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V��¦z1�/� x)(¡CFODO�MLCW�

[�I ? V�B1F�G >D�����]lm932kl�;!I F54N>�4%CWa³[�GSV�Z]V®VͧSCWO�[]O�M;\^MLY,6 , � � ©��b( 7/¬nO��JEHG¯[]GjMb[O]�SY $ � & � z & ,s�|©���¬328��63©���¬9�:+ p�4.-c4<;¯I5Z]V�I�e5V�Z�p*UJIL[]V&[]GjMb[6CWa=�#CFO6M.E�I5\&YJKFV�[�V;\&V�MLO��JZ]V;O]YJMLE�Vbp

� CWO6M.O�V�YjMLZ]M ? KWV �iMbUjMLEHGuO�YjMLE�V MLUJ�_� z>�0� x ( CFO6MLU�CFUA[�V�o5Z�M ? K @ ? I5�SUJ�JV��qp*UJI5UJV�\^Y�[ @ eLMbKF�JV��

Page 6: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�VDGjM�e�CFUJo6M%\&V�MLO��JZ�M ? KFVioLZ�MLYJGqp5[�GJV�U ?A@ e�CFZm[��JV�Iba�[]GJV � �S\ MLUSU&\&V�MbO]�JZ]M ? KFVnO]V�KWV�E�[�CFILU

[�GSV�I5Z�V�\�©�O]V�V � YJY�V�UJ�JCܧJ¬T�nV®E�MbU�E�I5UJE�KF�J�SV%[�GjMb[ $ �� CFOnUJI5UJV�\^YS[ @ Q0gÞ[`O]GJI5�SKF� ? V�UJIL[�V���[�GjMb[na�I5Zn[�GSVMLYJYSKFCFE�M ? CWKFCW[ @ ILa�[�GJV � �J\^MLUJU�\&V�MLO��JZ�M ? KFV/O�V�KWV�E�[]CFI5U:[]GJV�ILZ]V�\.pS[]GJV%Z�MbUJo5V%ILa3[]GJV%E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V�� (

C{Q�VLQfpS[]GJV�O]YjMbE�V6��\��JO�[ ? V�O]V�YjMLZ]M ? KFV®MbUJ��\^V�[�Z]CW��M ? KFVLQ�ÐILZn[�GJCWO�Z]V�MLO]I5U�CWU�[]GJV�O]� ? O]V����SV�UA[%O�V�E�[]CFI5USO

�TV:�`CFKFK�\^ML´LV:O��JZ]V^[�GjMb[ � � ©�� (h� ¬®CFO @ > �����h�]lm9<>�Q�¤³I []GJCFO�V�UJ��p��TV:�`CFKFK0GjM�eLV�[]I�MLO�O]�J\&V:[�GjMl[µ[�GSV\&V�MLO��JZ]V`O]YJMLE�V ©�� ( � (��3¬*MbUJ�&[]GJV �iMLUjMbEHG^O�YjMLE�V � MLZ]V ? IL[]G^O�V�YjMLZ]M ? KWVLQ*¤�GJCWO*aÒMLE�[�CWO��JO]V��^CWU&O�V�eLV�Z�MbK

O�[]V�YJODILa³[�GJV®YJZ�I�Iba�O�ILa|IL�JZ�[�GJV�I5Z]V�\^O�Q

¤�GJV�B1F�G >D������9 ;'&�G1��>#CE;!�3�E> @ ��;!F54N>�F CE>�� z�� � x)(�CWO��JV jUSV��$MbO`a�ILKFKFI��`O�z

� � �n©���¬ � �0©���¬o" $ � � &-©���¬ � �0©���¬izc&�, $ �� 254ghU�[�GJV®O]V��_�JV�K��TV6�`CWKFKq�SV�UJIL[]V6[]GJV6M ? I�eLV®CFUA[�V�o5Z�MLK ?_@�� � �Y(jI5Z � �Y4

� ? O]V�Z�e5V6[�GjMl[�pJCfa $ �� CFO�UJILUJV�\&YS[ @ pj�TV®E�MLU.E�I5USE�KF�S�JV�[�GjMb[�� � � CFO`MLKWO]I£UJILUJV�\&YS[ @ Q� �iMbUjMLEHGuO�YjMLE�Vk� GjMbO [�GSV��8� 4N;!F�?�B��];�4 2A� �+;E��>���G�2¯©²±DB���¬®�`Cf[�G�Z]V�O�Y�V�E�[�[]I¯[]GJV^\&V�MbO]�JZ�V

O]YJMLE�V�©�� (�� (��J¬DCfa*a�I5ZDV�MLEHG��_kÞE�I5UA[]CFU_�JI5�JO�e5V�E�[�I5Z/\^V�MLO]�JZ�V^�¥z � � �¥ILa ? I5�JUJ�SV��$ebMLZ]CFMb[�CWI5U�pJ[]GJV�Z�V

V�§�CWO�[�O`O�I5\^V��k, � � ©� (E�µ¬nO]�JEHG.[�GjMl[�a�I5Z`MLKFK��0, � (�^©��µ¬ " ��� �q©���¬ � ��©���¬34

gÞ[%CWO%M&O�[HMbUJ�jMLZ���Z]V�O��JKW[£©²X%CWV�O�[]V�K-MLUJ��dDGJK ��ª �N¬`[]GjMb[/CWa ���£©�[]GJV�UJI5Z�\ �J�jMLK3a�I5Z/Iba �£¬DGJMLO�[]GJV�±DB��

�`CW[]G�Z]V�O�Y�V�E�[D[�I¯©�� ( � (��J¬ÍpJ[�GJV�U© � � ©�N(E��¬�¬ � " ��� ©� (+� � ¬�4

t

Page 7: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

� ! "$� � ��7$���

����� ��� ��������������������� ��!�"$#%'& ()�*#+�-,."$!/&0&12#%�3�4�6587�9:�;�3&1�<#��4�=7

r�V�[µ©?>X(�@M(���¬ ? V6M£E�IL\^YJKWV�[]VLp jUSCW[�V®O�V�YjMLZ]M ? KWV6\&V�MbO]�JZ�V�O]YjMLE�VLpj�`GJV�Z]VA>X(j�JV�UJIb[�V�O`[�GSV6O�V�[DILa @ G ��G > @;'&�Fj��G IN�+> ;'&�G1��>e= ;!��9 4^MLUJ��[]GJVkn�khMLKFoLV ? Z]MB@��JV�UJIL[�V�Oµ[�GSV:O]V�[�ILaV>:C�>�F�G @ Q.r�V�[#� ? V M O]V�YjMLZ]M ? KFV

�iMLUJMLEHG O]YjMbE�V:�`GJI5O�V��J�jMLKTGjMLOµ[]GJV�±DB��³p|�JV�UJIL[�CWUJo []GJV CE;!A#Ak;�4�B1G�2^I5Z @ G ����G >D� 2 O]YJMLE�VbQ � @ ;LC�BH��9

@ 2 @ G >�A =oB1G1� � @ 2A#Ak>�GH�3BDC B1F & ;!�3A���G BD;!F�MLUJ��`Cf[�GM�\&V�MLO��JZ]V � @ ���NCE> ;'& �L�N>�F�G @ ©�� (�� (��S¬�piCWO^M O]V�[D " $�©'��(FE (hV(F@�G (IH:G²¬nz��8,���26�`GJV�Z�VLpv5Q ��z�� -J>7� x CFOi[]GJV�����F54N;!AS�NC�G BD;!F¯© @ G ����G >D� 2�¬iO]V�[�k{eLMbKF�JV��.a��JUSE�[�CWI5U�pS�`GSV�Z]Vbp�� ©��3(�Kn¬Y` �CWO�CFUA[�V�Z]YJZ�V�[�V�� MbO`[]GJV®O�[]Z�Mb[]V�o @ O�V�[�ILa|MLo5V�UA[ �nILa-[]GJV®O�[�Mb[�V®ILa-UjMb[]�JZ]V�KDQ

x�Q jI5Z�V�MLEHG S§�V��©��3(�Kn¬X,� -L>X(IE-©��3(�K�( " ( " ¬�z � � ©� (+��¬�- � ©��3(�Kn¬ � � CFO�[�GJVi����F54N;!A I GHB19 B1G�2&3INF C�G BD;!Fjpj�`GJV�Z]VAE|©��3(�K�(h&)(h&�G�¬`CWO�CWU_[]V�Z�YJZ]V�[�V��$MLOD[]GJV6�S[�CWKFCW[ @ a��JUJE�[]CFI5U.ILa0Mbo5V�UA[ �ÍpqMb[D[�GSV Om[HMb[]VILa-UjMb[]�JZ]V�KDpJ�SO]CFUSo&GSCFONMlGJV�Z`O�[]Z�Mb[]V�o @ &�G*MLUS� MLKWK�IL[]GJV�Z�YJKFM @ V�Z�O��SO]V�[�GJV � I5CWUA[`O�[�Z]Mb[�V�o @ &3Q

�SQ z � -O> - � � ©�� (E��¬ � x 0p�CWO�[]GJVK�h��F54N;!A CE;!F @ GH����B1F�G CE;!�3�E> @ ��;!F54N>�F CE>*ILa3MLoLV�UA[=�Íp��`GJV�Z�V�a�I5ZMLKWKT©��3(�K�(h&�¬ , � -L>/- � � ©� (+��¬�(J�©��3(�K�(h&�¬�`U� ©��3(�Kn¬�p�MLUJ���©��3(�K�(�&�¬`CWO/CFUA[]V�Z]YSZ]V�[]V���MbO�[�GSVE�I5UJO�[]Z�MLCWUA[`ILa*Mbo5V�UA[ �ÍpJ�`GJV�U.[�GJV®Om[HMb[]V6CWO=K MbUJ��IL[�GJV�ZDMLo5V�UA[]OD�SO]V®[�GJV � I5CWU_[`Om[�Z]Mb[�V�o @ &3Q

�JQ�@�G|CWOi[�GJV®O�� ? n�ksMLKWo5V ? Z]M�ILa�@ �`GJCFEHG.�JV�UJIL[�V�OD[]GJVX�j�3BPC!��G >KB1F & ;!�3A���GHBD;!F&Iba*MLoLV�UA[ �ÍQ��Q�H:G�zQ> � �BR�R�CWO.[]GJV �j�3BD;!��ILa;MLoLV�UA[8�Íp6C{Q�VLQfp M ±�ML�SI5U�ksBDCF´bI�� @ \ �JV�Z]CWebMb[]CWeLV�O��JEHG [�GjMb[

�FS HTG�©UKn¬ � �0©UKn¬b" vc4V ·�º�»�¼i»�Á�ÑÒÅ�½{»�ÑÒÈbÁ�Ýs»�WYX�Z\[]Z*^]_�ÊËѳÁ�Ñ{ÑÒÅ�¼i»]Â`¹{¸nÄL»0Ýs¸�¼iÈ�ÉÖ»m¹²»�Õ�ÛlÌ�ÊÖ¹²»0Á�ÌlÂ%ÑÒ»�ÈlÁͽÞÁÍÄ�ÉË»�Æ

«

Page 8: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

X%V jUSV®[]GJV®O]V�[ $ �(�� MLO�z$ �( � " $\*q©���¬ , � � ©��b(E��¬nz]*q©��3( " ¬Tz8>7� �#CFO

@�GFkÞ\^V�MLO]�JZ]M ? KWV®MLUJ� *�©��3(�Kn¬ ,M�¢©��3(�Kn¬%�9+ p�4 -c4 254B�Ib[�CFE�V¯[]GjMb[ $ �(�� CWO^[�GSV$O]V�[�ILa6MLKWK �TI�EHGJUSV�Z�CFUA[]V�o5Z]M ? KFV¯MLUJ�)@�GFkÞ\^V�MLO]�JZ]M ? KWV¯O�V�KFV�E�[]CFI5UJO^a�Z]I5\ [�GSV

Z�MbUJ�JI5\ Om[�Z]Mb[�V�o @ O]V�[.ILa�Mbo5V�UA[9�ÍQ#ghU<V�O]O�V�UJE�V�[�GSCFO�CFO:[]GJV¦O]V�[�p%I5��[¯Iba �`GJCWEHG Mbo5V�UA[*� �`CWKFK�YJCFEH´GJCWONMbGJV�Z�I5YS[]CF\^MLK/EHGJILCFE�V�O�Q ghU¡YjMLZ�[]CFE��JKNMLZ�pDMLU�V�KFV�\^V�UA[ &�G CFU $ �( � CFO�E�MLKFKWV���M @ G ����G >D� 2$a�I5Z�MLo5V�UA[�ÍQ ¤�GSV$[ @ YSCFE�MbK�V�KFV�\&V�UA[ ILa $ �( � CFO^�JV�UJIb[�V�� ?A@��&�G6MLUJ� []GjMb[ ILa6� ©��3(�Kn¬ ?A@ &�G�©PKn¬.©ÒI5Z�&�G²¬�Q r�V�[

$ �( " $ �& , � � ©� ( � � ©�� (E� ¬]¬µz �&*©���¬ , $ �( � � +7p�4 -c4 2_Q � U V�KWV�\&V�UA[6ILa $ �( �`CWKFK ? V;M�� ;!B1F�G @ GH����G >D� 2�j�+;�� 9<>�Q

���� 587=#+��3��& ��� �� #%����.#+����� # ! ��� �2! �"+�4��7 �2� " ��

gÞ[®�`CFKWK ? V;E�I5UAe5V�USCFV�UA[ [�I¯MLO]O��J\^V;[�GSZ]I5�JoLGJI5�S[®[�GSV&YJMLY�V�Z6[]GjMb[A> CWO6M CE;!INF�G �]lm9<>/O]V�[�MbUJ� []GjMb[®[�GSV

n�khMLKFo5V ? Z�M�@ GÐCWO|o5V�UJV�Z]Mb[�V�� ?_@ M/E�IL�JUA[HM ? KWViYjMLZm[�Cf[�CFILU���Iba >X4 jI5Z|V�MLEHG K7, >%pAKFV�[ ��G�©UKn¬³CWU����JV�UJIL[]V[�GSV�O�\ MLKWKFV�O�[�O�V�[TCFU @ G�E�ILU_[�MLCFUSCFUJo�K¢MbUJ�&[]I6MLO]O��J\^V`[�GJMb[0a�I5Z�V�MLEHG �Íp ������� � �! �#" H:G�©PK%$ܬ � �0©PK%$ˬ'& y�4 jI5Z

V�MbEHG S§�V�� ©��3(�Kn¬ ,��7-O>%p�[�GSVVB1F�G >���B1A >)( ��>EC�G >�4#INGHB19 B1G�2�ILa³MLo5V�U_[=�3(�*�©��3(�K�( " ( " ¬Tz $ �( -e�¢©��3(�Kn¬o�[�

CFO��SV jUJV��$MLO

*�©��3(�K�( �&)(h&�G²¬o" � �+�,� � � �#" E-©��3(�K $ ( �&-©PK $ ¬�(h&�Gs©PK $ ¬�¬�H:G�©PK $.- ��G�©PKn¬]¬ � �0©PK $ ¬�`GJV�Z]V

HTG�©UK $ - ��G�©UKn¬]¬o"/00001 00002y CWa�K%$�3, ��G�©PKn¬

4 � � � "��5687:9 �.; 6=< 4 � ?>�@"BA�C .>�D" CWa�K $ , ��G�©PKn¬34w

Page 9: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

��������� � ��� ������ � @ ;LC�BH��9)>��mINB19 BHlm�3B1I A�a�ILZ=D¦CFOTMµO�[]Z�Mb[]V�o @ YJZ�I jKFV �&�, $ �( O]�SEHG�[]GjMb[Ta�I5Z ��+rp�4 -c4©ÒCN¬ �&-©��3(�Kn¬ ,��©��3(�K�( �&�¬*�9+ p�4.-c4ÐMLUJ�©ÒCWC~¬ *�©��3(�K�( �&)( �&-©��3(�Kn¬]¬o"¡\^Ml§�� � � G�� � � >� " *�©��3(�K�( �&)(+*S¬%�,+ pJ4.-c4� E�I5�JYJKWV^ILaiE�I5\&\^V�UA[�O�MbZ]V&CFU�ILZ]�JV�Z�z�|CWZ]Om[µUJIb[�CFE�V&[]GjMb[ �& , $ �( CW\^YJKWCFV�O%[�GjMb[6a�I5Z6V�MLEHG �§SV��

� ,:� (h&-©��3( " ¬iCFODMLUB@�GFkh\&V�MLO��JZ�M ? KFV®O]V�KFV�E�[�CWI5U�a�Z]I5\ �¢©��3( " ¬�pjC{Q�VLQfp &-©��3( " ¬iCFO`EHGJI5O�V�U ?A@ MLoLV�UA[#�nO]I&[�GjMb[CW[%Z]V��JV�E�[]O®GJCFOIMbGJV�Z�I��`U¦YJZ�CWebMb[�VµCFUSa�I5Z�\ Ml[�CFILU�Q6PnI5UJ�JCf[�CWI5U ©ÒCN¬DCFUS�JCFE�Mb[�V�O/[�GjMl[�[�GJV£I5Y�[�CF\^MLK³EHGJI5CWE�V£CFO

CFU�[]GJV E�I5UJOm[�Z�MbCFUA[DE�I5Z�Z]V�O�Y�ILUJ�JV�USE�Vµa�I5Z`MbKF\&I5O�[DMLKWK�MLo5V�UA[�O�MLUJ�¯MLKF\&I5O�[DMbKFK�Om[HMb[]V�O�p|©ÒC²QÖVbQWp � + p�4 -c4�MLUS�� +�p�4.-c4Ô¬ÍQ�PnI5UJ�JCf[�CFILU�©ÒCWC~¬�CFO|[]GJV ? V�O�[0Z�V�YJK @ UJIb[�CFILU�pLC²QÖVbQWp5USI6YSKNM @ V�Z*E�MLU;�JV�e�CNMb[]Vna�Z]I5\ GJCWONMbGJV�Z�I5YS[]CF\^MLK

O�[]Z�Mb[]V�o @ ©ÒCWU�GJCWONMbGJV�Z|E�I5UJO�[]Z�MLCWUA[�O]V�[ͬ|MLUS��CFUJE�Z]V�MLO]ViGSCFONMlGJV�Z*YJM @ IL�:ILUJE�V�MbKFK_IL[�GSV�Z�MLoLV�UA[�O*GJM�eLV�EHGJI5O�V�U

[�GSV%I5YS[]CF\^MLKjO�[]Z�Mb[]V�o @ e5V�E�[�ILZ �&3Q � oAMLCWU^[]GJCFOTGJI5KF�SOna�I5ZTMLKF\&I5O�[nMLKWK�Om[HMb[]V�O`MLUS��MLKF\&I5Om[iMLKWK�MLo5V�UA[]O�pJC²QÖVbQWp�9+ p�4 -c4�MLUS� � + p�4 -c4

� � �/,&���*���µ2 ������������������������������� ���¯���³)*��2��`� !#"$�%�&���� �

��� ��/�4"$#%'7��2 �;9 �������4��� , " ! &0&0 #%�3��� "! � ���������3��� &

��V ? V�oLCFU ?A@ O�[�Mb[�CWUJo£[�GJV6MLO�O]�J\&YS[�CWI5UJO�UJV�V��JV�� [�I;YJZ�I�e5V6I5�JZ jZ�O�[DV�§�CFOm[�V�UJE�V®[�GJV�I5Z]V�\¯Q

�����$#�%'&3� �()� �

© � Qfv�¬

©ÒMA¬Y� z��U-J>7� x CWO�M£UJI5UJV�\^YS[ @ pJE�ILU_eLV�§�p�E�I5\&YjMLE�[iebMLKF�JV��.MLUJ��CFUA[�V�o5Z�M ? K @^? IL�JUJ�JV���pjO]V�[

ebMLKW�JV���a��JUJE�[�CWI5U�p

ª

Page 10: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

© ? ¬ jI5Z�V�MLEHG� S§�V��9�8,��6p � ©��3( " ¬nGJMLODMLU @ GFkÞ\^V�MLO]�SZ�M ? KWV�o5Z�MbYJG�pJC²QÖVbQWp�� ( G���� " ,J@�G�q���© ��¬�Q

© � QËx5¬

©ÒMA¬�jI5Z�V�MbEHG�©��3(�Kn¬ , � - >X(IE-©��3(�K�( " ( " ¬^z � � ©� (+��¬�- �¢©��3(�Kn¬�� � CFO�E�I5UA[�CWU��SI5�JO£�`GJV�Z�V

� � ©�N(E��¬nCWO�V�UJ�JI��TV�� �`Cf[�G�[�GSV®�TV�Mb´:[�I5Y�I5KFILo @ MbUJ� �¢©��3(�Kn¬��`Cf[�G�[�GSV6USI5Z]\ []I5Y�I5KFI5o @ Q

© ? ¬�jI5Z�V�MLEHG S§�V��$©'&)(+*S¬ , � � ©�� (E��¬ -V�:p E-© " ( " (h&)(h*J¬0z�� -A> � �¥CFO0M�\&V�MLO��JZ�M ? KFVia��JUSE�[�CWI5U�Q

©�E�¬ jI5ZiV�MbEHG ©��3(�K�(h&�¬ ,�� -J>U- � � ©�N(E��¬Íp�E|©��3(�K�(h&)( " ¬Tzc� ©��3(�Kn¬ �[� CWO�E�I5UJE�M�e5VLQ

©��Ь jI5Z�V�MLEHG,�8,�� (FE|©��3( " ( " ( " ¬�CFO�CWUA[�V�oLZ�M ? K @:? I5�JUJ�SV���Q© � Q �A¬

©ÒMA¬ z��/- > - � � ©� (E�µ¬ � x �GjMLODM£\^V�MLO]�SZ�M ? KWV�o5Z�MbYJG�Q

© ? ¬ jI5ZDV�MbEHG ©��3(�Kn¬ , �a- >X(+�©��3(�K�( " ¬Dz � � ©�� (E�µ¬8� x CFO�M^�TV�ML´_K @ E�I5UA[�CWU��SI5�JO%E�I5Z]Z�V�O]Y�I5U�k

�JV�UJE�V®�`CW[]G�E�KFILO]V��qpjE�I5UAe5Vͧ MLUJ��UJI5UJV�\^Y�[ @ eLMbKF�JV�O�Q

© � Q �_¬

¤�GJV®E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�V ���� $ �( � GJMLODM;\&V�MbO]�JZ]M ? KFV�oLZ�MLYJGqQ

��� � � � % �jz%r�V�[ D ? V£M:O]I�E�CFMLK|O @ O�[�V�\ �`CW[]G¦MLO @ \&\^V�[�Z�CFEµCWUSa�I5Z�\ Mb[]CFI5U¯O�Mb[]CFOma @ CWUJo¦© � Qfv�¬`k © � Q �_¬�Q

¤�GJV�U$M£O]I�E�CFMLK�V��_�JCWKFC ? Z]CW�J\ V�§�CFOm[�ODCFU D�Q

�+;L;'& -CFZ]Om[�I ? V�O�V�Z�eLV^[]GjMb[�[�GSV&O�V�[ $ �( � CWO�UJI5UJV�\^Y�[ @ Q&ghUJ�JV�V���CWU$e�CWV�� ILa�MLO�O]�J\&YS[]CFI5U � Qfv_© ? ¬�p

?A@ e�CWZ�[]�JV�Ibaq[�GSV � �J\ MbUJU \&V�MLO��JZ�M ? KFV`O]V�KFV�E�[�CWI5U;[�GJV�I5Z]V�\¯p_�nV�E�MLU^E�I5USE�KF�S�JVD[]GjMb[ $ �( � CFO0UJILUJV�\&YS[ @ pv�y

Page 11: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

MLUJ� O]CW\^CWKNMLZ�K @ p��TV^E�MLU�MbKFO]I�E�I5UJE�KW�J�JV;[�GjMl[ $ �( CWO6MLKFO�I.USI5UJV�\&YS[ @ Q^gÞ[6a�I5KFKWI��`O/a�Z]I5\ © � QËx5¬�MLUJ�¦[�GSV

aÒMLE�[µ[�GJMb[ >#CWOµM E�I5�JUA[HM ? KFV^O]V�[ [�GjMl[µa�I5Z6V�MLEHG¡©��3(�Kn¬#, �%->X( *�©��3(�K�( " ( " ¬�z $ �( -_� ©��3(�Kn¬K� �

CFODE�ILU_[]CFU_�JI5�SO��/�`GJV�Z]V $ �( MLUS� � � ©�� (+��¬`MLZ]V6V�UJ�SI��TV��$�`Cf[�G.[�GJV6�nV�ML´�[�I5Y�I5KFILo @ MLUJ� � ©��3(�Kn¬�pj�`CW[]G[�GSV&USI5Z]\ []I5Y�I5KFI5o @ Q£BDIL[�CWE�V�[�GJMb[®a�I5Z�V�MLEHG S§�V�� ©��3( �&)(+*S¬K, � - $ �( - �Y( *£©��3( " ( �& (h*J¬®z > � � CFO

@�GFkh\&V�MLO��JZ�M ? KFV;MLUS�¦a�ILZ�V�MLEHG © �& (+*S¬�, $ �( -:� p *�© " ( " ( �&)(h*J¬®z � - >a� � CWO���q)@ GNkÞ\^V�MLO]�JZ]M ? KWVLQj�JZ�[]GJV�Z�\^ILZ]VLp ?A@ © � QËx5¬:©ÒE�¬µCW[�a�ILKFKFI��`Oµ[]GjMb[£a�I5Z�©��3(�K�( �&Ь , �0- >%- $ �( (�*�©��3(�K�( �&)( " ¬ CWO£E�I5USE�M�e5VbQX%V JUJV�[�GJV6O]V�[�kÞebMLKW�JV���a��JUSE�[�CWI5U�� z��/- >U- $ �( � x ?A@ �£©��3(�K�( �&�¬ " �©��3(�K�(�&�¬�p3©�Z]V�E�MLKFK�[]GjMb[�a�I5ZMLKWK�©��3(�K�(h&�¬ ,8�/- > - � � ©� (+��¬�(h£©��3(�K�(h&�¬ `7� ©��3(�Kn¬]¬�Q*X%V jUJV���z �/- > - $ �( � x ?_@

�^©��3(�K�( �&Ьo"a$\*k,��£©��3(�K�( �&Ьnz *£©��3(�K�( �&)(+*S¬o" \^Ml§���� G�� � � >� " *�©��3(�K�( �&)(�A¬3254

gÞ[*E�MLU ? VnV�MbO]CFK @ EHGJV�EH´bV��;[�GjMl[���CFO|USI5UJV�\&YS[ @ ebMLKF�SV���Q-ghUJ�JV�V���pAO]CWUJE�ViMLKFKA[�GSVTebMLKF�SV�O|Ibaj[�GJVTO]V�[|eLMbKF�JV��

a��JUJE�[�CWI5U MLZ�V E�I5UA[HMLCWUJV��.CFU�[�GSV6�TV�ML´_K @ E�I5\&YjMLE�[�O�V�[�� © " ( " ¬�MLUS� CFO`E�KWI5O]V�� MbUJ� E�I5UAe5V�§u©�GJV�UJE�V

�TV�ML´_K @ E�KFI5O�V��ЬÍpbCf[³a�ILKFKFI��`O�[]GjMb[ �CWO3�TV�Mb´�K @ E�I5\&YjMLE�[-ebMLKW�JV��qQ���CWUJE�Vbpla�ILZ-V�MLEHG�©��3(�K�( �&�¬ ,�� -�>W- $ �( p*�©��3(�K�( �&)( " ¬iCFODUJI5Z�\ ��QÖO�QÖEbQDMLUJ�$E�I5UJE�M�eLV�CFU � ©��3(�Kn¬�pÐCW[DCFO�MLKWO]I;�nV�ML´_K @ ��QÖO�QÖEbQ ©ÒO]V�V��iMLKW�JV�Zsk{RTMLUSUJV�KWCFO�Îv�ª5ª �Sp�¤�GSV�I5Z�V�\ x�QÖw �~¬%MbUJ� []G_�JO�p-MLUJ�¦�nV&E�ILUJE�KW�J�JV£[�GjMl[�� CWO�UJI5UJV�\^Y�[ @ ebMLKF�JV���Q;gÞ[®a�I5KFKWI��`O%a�Z�I5\

© � QÔxL¬�©ÒE�¬ÍpJ[�GjMl[�� CFO�E�ILU_eLV�§.ebMLKF�SV���Q

� @ e�CFZm[��JV�Iba�[]GJV �nV�Z�o5V�\^Ml§�CF\��J\ [�GSV�I5Z�V�\.p5a�I5Z*V�MbEHG S§�V��$©��3(�Kn¬ ,��_- >X(��^©��3(�K�( " ¬Tz $ �( � x

CFO6�nV�ML´_K @ ��Q�O�Q�ELQ j�JZ�[]GJV�Z�\^I5Z�VLp|a�Z�I5\ PiMLO�[�MLCFUSobk���MLKFML�JCWV�Z ��r�V�\^\^M¯g�g]gHQ �5ªSp*Y�QÖw5tSpnv�ªA«5«��²p��^©��3( " ( �&�¬^z> � x GjMLOµMLU @�GFkh\&V�MLO��JZ�M ? KFV&o5Z�MbYJG�p�MLUS��� © " ( " ( �&Ь^z>� - > � x GjMbO�M �kq @�GFkh\&V�MLO��JZ�M ? KFVo5Z]MLYJG�Q

��� »m»-¿Ü¸�½�»���ÁͼiÈ�ÉË»��*Ê˼nä���Á�Ì�Ì�»�ÉÖÊÔÑ'W���� �"!�Õ"#_»�¼n¼�ÁTÇ0Æ ×:_j¸�½�â�ÁÍÉÔÂ�»�½Òä$��ÁÍÌ�Ìl»mÉËÊËÑ'W%��� �'& _S¿Ü¸�½qÝs¸�¼iÈ�ÉË»s¹{»-Á�½)(�Å�¼i»mÌ�¹{Ñ�¸Í¿A¹²ºl»Ýs¸�Ì�¹²ÊËÌ�ÅlÊ�¹�¾`¸�¿�¹{º�»�»���ÈL»�Ýs¹²»�Â/Å�¹{ÊÖÉËÊÖ¹�¾�Æ

v5v

Page 12: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

X%V jUSV®[]GJV®O]V�[�kÞebMLKW�JV���a��JUJE�[�CWI5U �¢z �/- $ �( � x���� C � " ?A@

�i©��3( �&�¬o"a$ �*�©���¬8, � � ©�� (E� ¬�z �*�©��3(�Kn¬ , �^©��3(�K�( �&Ь*�9+ p�4.-c4 28O $ �( � 4� @ [�GJV�\&V�MLO��JZ�M ? CFKWCW[ @ KFCfa~[�CFUSoT[�GSV�I5Z�V�\#©�O]V�V � YJY�V�UJ�JCܧJ¬�[�GJV�E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�V � �� $ �*q©���¬8, � � ©�� (E� ¬iz�*�©��3(�Kn¬�, �^©��3(�K�( �&�¬*�8+7p�4.-c4 2 GjMLO6M�\^V�MLO]�JZ]M ? KWV�o5Z�MbYJG�MbUJ�¦O]I.�JI�V�O�� �� $ �( � ?A@ © � Q �_¬�Q£¤�G_�JO�p

a�I5Z®V�MbEHG� S§�V�� �& , $ �( (��i© " ( �&�¬�GjMLO M.\&V�MLO��JZ�M ? KFV;o5Z]MLYJG�Q���CFUJE�V&a�I5Z®V�MLEHG S§�V�� �&7, $ �( (��^© " ( " ( �&�¬GjMLO/M \&V�MLO��JZ�M ? KFV6o5Z�MLYSG�MLUJ�$Cf[/CWO�USI5UJV�\&YS[ @ kÞebMLKW�JV��¯[�GJV�U ?A@ []GJV � �J\ MbUJU$\&V�MLO��JZ�M ? KFV6O]V�KWV�E�[�CFILU

[�GSV�I5Z�V�\.pjCW[�ML�J\&CW[]O`M&\&V�MLO��JZ�M ? KFV�O�V�KFV�E�[]CFI5U¯MLUJ�.�nV6E�MLU¯E�I5USE�KF�S�JV�[�GjMb[��¢CFO�UJI5USV�\&YS[ @ ebMLKF�JV���QngÞ[

a�I5KWKFI��`OTa�Z�I5\¥[]GJV�E�ILU_eLV�§�ebMLKW�JV�USV�O]O�Iba� [�GjMl[���CFO�MbKFO]IµE�I5UAe5Vͧ�ebMLKF�JV���Q�� @ X%CFV�O�[�V�K{��On[�GSV�I5Z�V�\�©�O]V�V

� YSY�V�UJ�JCf§J¬|[�GSV�O]V�[ $ �(�� CFO0M%�TV�ML´_K @ E�I5\&YjMLE�[0O]� ? O�V�[TILa � � ©�� (E�µ¬*MLUJ�;O]I®CWO $ �( Q�BDIL[�CWE�Vi[]GjMb[ $ �( CWO0M

\&V�[�Z�CF��M ? KFVnO]V�[�MbO ? V�CWUJo®M%�nV�ML´_K @ E�I5\&YjMLE�[0O�� ? O�V�[TILa�[]GJV�O]V�YjMLZ]M ? KFV �iMbUjMLEHG&O]YjMLE�V � � ©�� ( � � ©�� (E��¬�¬�p©²X%�SUSa�I5Z]��k ��EHGA�nMLZ�[]���Îv�ªA�bwSp*Y�Q � � � �N¬�Q gÞ[£a�I5KWKFI��`O a�Z�I5\�[]GJV���Q�O�Q�ELQ�KFCWa~[]CFUJo.[�GJV�I5Z]V�\ ©�O]V�V � YJY�V�UJ�JCܧJ¬

[�GJMb[�a�I5Z�V�MbEHG S§�V��,�3(��i©��3( " ¬TCWO��nV�ML´_K @ ��Q�O�Q�ELQTX%V JUJV�[�GJV®E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V��<z $ �( � x�� �� ?_@

��© �&q¬o"a$ �*e, $ �( z �*�©���¬8, �i©��3( �&�¬ � + p�4.-c4 254� USIL[�GJV�Z�MLYJYSKFCFE�Mb[�CWI5U&ILa3[�GJV%�qQÖO�QÖEbQ�KWCWa~[]CFUJo®[�GJV�I5Z]V�\(©�O]V�V � YJY�V�UJ�SCf§J¬TV�UJM ? KFV�O��JOn[]I�E�I5USE�KF�S�JV%[�GjMl[�

CFO�M^�TV�ML´_K @ �qQÖO�QÖEbQ%E�I5Z�Z]V�O]Y�I5UJ�JV�UJE�V��`GJCWEHG$CFODI ? e�CFI5�SO]K @ E�I5UAe5V�§ ebMLKF�JV�� ©�O]CFUSE�V � CFODE�I5UAe5Vͧ$ebMLKW�JV��Ь

MLUJ�¢MbKFO]I¯UJI5UJV�\^Y�[ @ ebMLKF�SV���©�Z]V�E�MLKFK�I5UJE�V:\&I5Z]V&[�GJV � �J\^MLUJUu\&V�MLO��JZ�M ? KFV^O]V�KWV�E�[�CFILU�[�GJV�I5Z]V�\ MLUS�

UJIL[]CFE�V�[]GjMb[|[]GJVnO�V�[ $ �( CFO³\&V�[�Z�CF��M ? KFV�¬�Q���CWUJE�V�[�GJVTO]V�[ $ �( CWO-�TV�ML´_K @ E�I5\&YjMLE�[�pLE�I5UAe5V�§£MLUJ��USI5UJV�\&YS[ @

[�GSV ÐMLU�k��KFCFEH´_O ? V�Z]o:[�GSV�I5Z�V�\�CFO®MbYJYJKFCWE�M ? KFV£MLUS� []GJV�Z�V&CWO6M� �§SV���Y�I5CFUA[�p³C²QÖVbQWp�[]GJV�Z�V^Vͧ�CFO�[ �& �#, $ �(O]�SEHGu[�GjMb[ �& �k,���© �& ��¬Íp-�`GJCWEHGuCF\&YJKFCWV�O%[]GjMb[6a�I5Z �%+ p�4.-c4Wpi©ÒC~¬ �& ��©��3(�Kn¬#, �©��3(�K�( �& ��¬9�:+ p�4.-c4|MLUS�©ÒCWC~¬ *�©��3(�K�( �& � ( �& � ©��3(�Kn¬]¬�"¥\^Ml§ � � � G�� � � >�� " *�©��3(�K�( �& � (h*J¬ �:+ pJ4.-c43¤�GJCFO®E�I5\^YSKFV�[]V�O�[�GSV&YSZ]I�ILaiILa�[�GSV

v�x

Page 13: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

[�GSV�I5Z�V�\.Q

�� �� 7��= �/�49 ! ��7�� �� �� #

��V6�`CWKFK�UJI�� O�GJI���[�GJMb[`[�GJV6E�I5USE�M�e�CW[ @ MLO�O]�J\&YS[�CWI5U.I5U.[]GJV6�S[�CWKFCW[ @ a��JUJE�[�CWI5U¯E�MLU ? V6�JZ]ILYJY�V���Qn¤�GSV

´LV @ E�ILUJ�JCW[]CFI5U$[]GjMb[�Cf[�CFO/CFUA[�Z�I��J�SE�V��¦CWO/[�GJV&MLO�O]�J\&YS[]CFI5U�ILaµ­�\^MLU @ \^I5Z�V£MLo5V�UA[�O�[�GjMbU Om[�Z]Mb[�V�o5CFV�O]°Jp

[�GJMb[0CFO�p5[�GJV`�JCW\^V�UJO]CWI5UjMLKWCW[ @ ILaÐ[�GJV`O�V�[�ILaqMLo5V�UA[]O�CWO�o5Z]V�Mb[�V�Z�[�GjMLU£[]GJV`�JCF\&V�UJO�CFI5UJMLKFCf[ @ ILa�[]GJV`O�[]Z�Mb[]V�o @

O]YJMLE�VbQ�ghU�[�GSCFO�O]V�[D�JY�pJ[�GSV�O]V�[DILa � I5CWU_[iO�[�Z]Mb[�V�o5CFV�O $ �( pS�`CWKFK�UJI�� ? V6Z�V�YJKFMLE�V�� ?_@ [�GJV®CFUA[]V�o5Z]MLKqILa³[�GSV

O]V�[�k{eLMbKF�JV��.Om[�Z]Mb[�V�o @ E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�VK� Q � O`YJZ]V�e�CWI5�JO�K @ pSKFV�[ $ �( � " $\*q©���¬ , � � ©�� (E�µ¬nz]*�©��3( " ¬Tz8> ��#CFO @�G + \^V�MLO]�JZ]M ? KWV®MLUJ� *q©��3(�Kn¬Y,M� ©��3(�Kn¬ �9+ pJ4.-c4 2 (-MLUJ�uKWV�[ $ �( " $ �*., � � ©� ( � � ©�� (E�µ¬]¬^z�*�©���¬8, $ �( � � + p�4.-c4 254ÐX%V jUJV�[�GSV6CWUA[�V�oLZ�MLK�Iba � MLO�z � � ��� � � � ©���¬ � ��©���¬ "a$ � � �&�z �&�, $ �( 254

¤�GJV B1F�G >��3B1A >)( ��>EC�G >�4 ING B19 B1G�2�ILa MLo5V�UA[%�Íp �*£©��3(�K�( " ( " ¬¦z�� � � -.� ©��3(�Kn¬M� � CFO:�JV jUJV��<MbO

YJZ�V�e�CFI5�SO]K @ p ? ��[�UJI���[�GJV%O�V�[�Iba � I5CFUA[TO�[�Z]Mb[�V�o5CFV�OiGjMLO ? V�V�U�Z]V�YJKNMbE�V�� ?_@ [�GJV/CFUA[�V�o5Z�MLK²p � � �uQ*¤�GJV ? MLZCFUS�JCFE�Mb[�V�O®[]GjMb[®[�GSCFO®CFUA[�V�Z]CW\(V�§�Y�V�E�[]V��u��[�CFKWCW[ @ GjMLO6�JCW��V�Z�V�UA[6�JI5\^MLCFU�[�GJMLU []GJV&I5UJV&CFU���V�E�[�CFILU �JQfv5Q

¤�GJV®CF�SV�M£ILa3[�GJV®YJZ�I�Iba-CWO�O]CW\^CWKNMLZ�Q �DI��TV�eLV�Z�pÐ�TV®GjM�e5V®[�I;Z]V�YJKNMbE�V�CFU:[]GJV6ML�Jo5\&V�UA[�pS[�GJV��qQÖO�QÖEbQTKWCWa~[�CWUJo

[�GSV�I5Z�V�\&O�pb�`Cf[�G�[�GSV�aÒMLE�[3[�GjMb[³CWU_[]V�o5Z]Mb[�CWI5U®YJZ]V�O]V�Z�e5V�O*��Q�O�Q�ELQfpAMLUJ� MLKWO]I`\ Mb´LV��JO]V�ILaS[]GJV0[�GJVT±D�SO�[�CWEHGJCFUSCfk

RTMLUJUSV�KFCWO£©sv�ª5ªSv�¬i[�GSV�I5Z�V�\ �`GJCFEHG�YJZ�I�e5V�O%[]GjMb[%[]GJVµCWUA[�V�oLZ�MLK³ILa�M �iMbUjMLEHG�k{eLMbKF�JV���E�I5Z�Z]V�O�Y�ILUJ�JV�USE�V£CFO

E�ILU_eLV�§;YSZ]I�e�CF�JV��;[]GjMb[-[�GJV��JCW\^V�UJO]CWI5UjMLKWCW[ @ Iba�[]GJViO�YjMLE�V�IbaqMbo5V�UA[�O|CFO ? CWo5o5V�Z-[�GJMLU�[�GJVn�JCF\&V�UJO�CFI5UJMLKFCf[ @

ILa³[�GJV®Om[�Z�Ml[�V�o @ O]YjMbE�VLQ � KWKq[�GSV�O]V®[�V�EHGJUJCWE�MLK��JV�[HMLCWKFOiE�MLU ? V�a�I5�JUS�.CWU�[�GJV � YSY�V�UJ�JCf§�Q

��������� � ��� ��� � � ©ECE;!F�C�>)(cB & 2!B1FN��� @ ;LC�BH��9 � @ 2A#Ak>�GH�3BDCk>��mINB19 BHlm��B1INA#a�I5Z�D CFO�M:Om[�Z]Mb[�V�o @ YJZ�I jKWV �& �CFU � G � pjC²QÖVbQWp�[�GJV�Z]V®V�§�CFOm[ �&*©���¬ , $ �( � � + p�4.-c4 (�� � �& " �& � pjO]�JEHG.[�GjMl[�pSa�I5Z�� + p�4.-c4 (

v �

Page 14: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

©ÒCN¬ �&-©��3(�Kn¬ ,��©��3(�K�( �& �H¬ �9+ pJ4.-c4fpÐMLUJ�©ÒCWC~¬ �*£©��3(�K�( �& � ( �&-©��3(�Kn¬]¬o"<\^Ml§ � � � G�� � � >�� " �*�©��3(�K�( �& � (+*S¬ �9+ p�4 -c4¤�GJV�CF�JV�MDILaJMDE�I5UAe5VͧSCfa @ CFUJoDV��_�JCWKFC ? Z]CF�S\<CWO³USIL[³UJV��®pla�I5Z³MD�JCf�qV�Z]V�U_[3a�Z]ML\^V��nILZ]´%Cf[��iMLO-CFUA[�Z�I��S�JE�V��

?A@ ��MLKFKWV�Z �Üv�ª5ª � �²Q�� ��MLKFKWV�Z��TI5Z]´_O��`CW[]GuM JUJCW[]V �JCW\^V�UJO]CWI5UjMLK0O�[]Z�Mb[]V�o @ O]YJMLE�Vbp*[�G_�JO�p�GSV:�JI�V�OµGJM�eLV

­�\^MLU @ \^ILZ]VTMLo5V�UA[]O|[�GjMbU�O�[]Z�Mb[]V�o5CWV�O]°�CF\&YJKFCWE�Cf[�K @ CWUµGJCWO|\&I��JV�K{Q �/MbKFKFV�Z �Üv�ªLª � �²pLMLKWO]I�E�I5UJO�CF�JV�Z]O*CWU jUJCf[�V

�JCW\^V�UJO]CWI5UjMLK�Om[�Z]Mb[�V�o @ O]YjMbE�V�O ? �S[`[�GJV E�I5USE�M�e�CFUJo^MLO]O��J\&YS[�CWI5U¯E�MLUJUJIb[ ? V �SCFO]Y�V�USE�V��¯�`CW[�Gqp ? V�E�ML�JO�V

CFU^GJCFO0a�Z�Mb\^V��nI5Z�´�[�GJV/r @ MLYJ�SUJI�e^[]GJV�I5Z�V�\ aÒMLCFKWOD©ÒC²QÖVbQWp_[�GJV��JCF\&V�USO]CFILU MLO�O]�J\&YS[]CFI5U$© � QË�5¬ ? V�KFI��®p�\ M @

UJIL[`GSI5KF�ЬÍQ

¤�GJVDUJIL[�CWI5U;ILaq[]GJV`V��_�JCWKFC ? Z]CF�S\ CWO0[]GJV`O�ML\&VDMLO0CFU;�JV jUJCW[]CFI5U �JQfv5p_V�§�E�V�YS[T[�GjMb[0USI�� E�I5UJ�SCW[�CWI5U¯©ÒCWC~¬

CFUS�JCFE�Mb[�V�Oi[�GjMb[DUJI&MLoLV�UA[/E�MLU.�JV�e�CNMl[�V%a�Z]IL\ GJCFOIMbGJV�ZDILYS[�CW\ MLK�O�[]Z�Mb[]V�o @ MbUJ�¯CWUJE�Z�V�MLO�V®GJCFOIMbGJV�Z`YjM @ IL�|Q

��I��TV�eLV�Z�pTMLKWK�Ib[�GJV�Z�YJKNM @ V�Z���O�Om[�Z�Ml[�V�o @ CWOµE�MbYS[��JZ�V�� ?A@ []GJV CWUA[�V�oLZ�MLK/©²M�e5V�Z�MLoLV�O]�J\�ILa�[�GSV:I5YS[]CF\^MLK

CFUS�JCWe�CF�S�jMLK³O�[�Z]Mb[�V�o5CFV�OH¬Íp�C{Q�VLQfp �& �X" � � �&�MLUJ��[]GJV�V���V�E�[®ILa�V�MLEHG¦CWUJ�JCWe�CW�J�jMLK²�ÖODO�[]Z�Mb[]V�o @ �&*©��3( " ¬`I5U$[�GSVMLo5oLZ]V�o5Mb[�V&©ÒM�eLV�Z]MLo5V�¬�CFO�O�CF\&YJK @ ��V�Z]IJQ0¤�GJCWODCWO`CFU�V�O�O]V�USE�V []GJV®CF�JV�M£ILa*Y�V�Zma�V�E�[DE�I5\^Y�V�[]CW[]CFI5U�p��`GJCFEHG.CFO

E�MbYS[��JZ�V�� ?A@ IL�JZ/\&I��SV�K{Q�B�Ib[�CFE�V []GjMb[%CWU$�JV jUJCW[]CFI5U �JQfv5p��TV£MLZ�V��JV�MbKFCFUSo&�`Cf[�G$YJZ�I��S�JE�[]O�MLUJ�$[]GJV�Z�V

CFO�USI^E�I5UAe5V�§�Cfa @ CWUJo&V���V�E�[DI5U¯MLo5oLZ]V�o5Mb[�CWI5U�Q

¤�GJV MLO]O��J\^Y�[�CFILU.Iba�­�\^MLU @ \&I5Z�V®MLo5V�UA[]O`[]GjMLU.O�[]Z�Mb[]V�o5CWV�O]°;CWO`a�ILZ]\^MLKFK @ O�[HMl[�V��qz

� � �����$¤�GSV YjMLCWZ$©�©�� (���(��J¬3(E��¬;O�Mb[]CFO JV�O^[]GJV E�I5UJ�JCf[�CWI5U ILa%¤�GJV�I5Z�V�\ � CWU[�GSV � YSY�V�UJ�JCf§�p�C²QÖVbQWp�Cfa

� ,���(���©��µ¬'& ySpS[]GJV�U¯�JCF\ ��� � � ©�J¬'& �SCF\.�^Q

� Ç3Ì�»]Áͽ{ÉÖ¾��»m½ÞÑÒÊ˸�Ì�ÏqÁ�Ñ�ÝsÊ˽{ÝmÅ�ÉËÁ͹²»]Â�Á�Ñ�ÁTÏq¸�½{á�ÊÖÌ (TÈlÁ�Èb»�½3ÁH¹�-Ó�Ú�ÊËÌ ��� ����Æ

v �

Page 15: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

��� � � � % �zµr3V�[ D ? V M.O]I�E�CFMLK�O @ O�[]V�\ �`CW[]GuMLO @ \&\&V�[�Z�CFE;CFU�a�I5Z]\^Mb[�CWI5U�O�Ml[�CFOma @ CFUJo�© � QWv�¬Íp�© � QËx5¬�p

©²M5¬�p3© ? ¬�p³©��ЬiMLUJ��© � Q �5¬�k/© � QË�5¬ÍQ�¤�GJV�U M;E�I5UAe5VͧSCfa @ CFUJo&O]I�E�CFMLK�MLO @ \^\&V�[]Z]CFE�V��_�JCFKWC ? Z�CF�J\ V�§�CWO�[�O`CWU D�Q

�+;L;'& � O0CFU£[�GJVDYJZ�I�ILa�ILa�¤�GJV�ILZ]V�\ v5p5[]GJVDE�I5UA[�CWU_�JCW[ @ MbUJ�^\&V�MbO]�JZ]M ? CFKWCW[ @ YJZ]ILY�V�Z�[�CWV�O0ILa�[�GJVDCFUA[]V�Z]CW\

V�§�Y�V�E�[�V����S[�CWKFCf[ @ �* z � - > -�� � � -r�¢©��3(�Kn¬ � � MLZ]VµO�[�CWKFK³eLMbKFCF�qp ? �S[®USI�� a�I5Z%V�MLEHG©��3(�K�( �&�¬�,� -J>U- � � ��( �*�©��3(�K�( �&)( " ¬TCFO`UJIL[`E�I5UJE�M�eLVLQ0��V��`CWKFK�O�GJI�� ? V�KFI��<[�GjMb[�[]GJCFO�CWO�UJIL[�M£YJZ]I ? KFV�\¯Q

X%V JUJV � z��/- >U- � � � � x ?A@ �£©��3(�K�( �&�¬ " £©��3(�K�(h&�¬�QX%V JUJV�� z�� - >s- � � � � x ?A@

�^©��3(�K�( �&Ьo"a$\*k,��£©��3(�K�( �&Ьnz �*;©��3(�K�( �&P(+*S¬o" \^Ml§�� �� G�� � � >� " �*;©��3(�K�( �&P(�A¬3254

� O®CWU []GJV �0Z�I�IbanILaT¤�GJV�I5Z]V�\ vLp��9CFO®UJI5UJV�\^Y�[ @ ebMLKF�JV���p3Z]V�E�MLKWK|[�GjMl[ �*£©��3(�K�( �&P( " ¬/CFO��nV�ML´_K @ �qQÖO�QÖEbQMLUJ� �9CFO6�nV�ML´_K @ E�I5\&YjMLE�[ ebMLKF�JV��uO]I$[]GJV:\^Ml§�CF\��S\�CFOµI ? [HMLCWUJV��qQ � O�CWU�[�GSV:YJZ]V�e�CFI5�JO [�GJV�I5Z]V�\¯p

a�I5Z�V�MLEHG� S§�V���©1&)(�Kn¬ , � - >X(��^©��3(�K�( " ¬�z � � � � x CWO:�nV�ML´_K @ �qQÖO�QÖEbQ MLUS�¡a�I5Z�V�MLEHG� �§SV��

�&�, � � �M(��^© " ( " ( �&�¬iz �/- >7� x GJMLODM&\&V�MLO��JZ�M ? KFV%oLZ�MLYJGqQ

X%V jUSV®[]GJV®E�I5Z�Z]V�O]Y�I5UJ�JV�UJE�V �¢z �/- � � � � x ��� C � " ?_@

�i©��3( �&�¬o"a$ �*�©���¬8, � � ©��b(E�µ¬iz �*�©��3(�Kn¬ , � ©��3(�K�( �&�¬ �9+ p�4.-c4 254jI5Z*V�MLEHG� S§�V�� �8,�� (��n©��3( " ¬-CFO|�TV�Mb´�K @ ��Q�O�Q�ELQ0MbUJ��a�I5Z*V�MLEHG� S§�V�� �&�, � � ��(��i© " ( �&�¬-GjMLO0M%\&V�MbO]�JZ]M ? KFVo5Z]MLYJG ©�O]V�V � YSY�V�UJ�JCf§J¬ÍQ/X%V jUJV�� z � � � � x ��� ( ?_@ ��© �&�¬ " � � �n©��3( �&q¬�4Ф�GJV�Ur��CFO`�nV�ML´_K @ ��Q�O�Q�ELQfpUJI5USV�\&YS[ @ ebMLKW�JV��©ÒZ�V�E�MLKFK � �J\^MLUJU���O�\&V�MLO��JZ�M ? KFV�O�V�KFV�E�[]CFI5U$[]GJV�I5Z�V�\ ¬�p�MbUJ� ?_@ ¤�GJV�I5Z�V�\ � CFU$[�GSV

� YSY�V�UJ�JCf§:CW[�CWOiE�ILU_eLV�§�Q � O�UJIL[]V���CFU:[]GJV � YSY�V�UJ�JCf§�p � � � CWOn�nV�ML´_K @ E�I5\&YjMLE�[�MLUJ��E�KWV�MLZ�K @ E�I5UAeLV�§�p

\&V�[�Z�CF��M ? KFV.©�Z]V�E�MLKWK0[]GjMb[6�nV�ML´_K @ E�IL\^YjMbE�[6O]� ? O]V�[]O�ILa`M�O]V�YjMLZ]M ? KFV �iMLUjMbEHG�O]YJMLE�V MLZ]V&\^V�[�Z�CF��M ? KFV�¬�p

v��

Page 16: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

MLUJ�&CW[�CWO0MLKFO�IJp_UJI5UJV�\^YS[ @ ebMLKW�JV�� ©ÒZ�V�E�MLKFKjMbO]O]�S\^YS[]CFI5U © � Q �A¬0MbUJ�^[]GJV � �J\^MLUJU&\^V�MLO]�SZ�M ? KWV`O]V�KWV�E�[�CFILU

[�GSV�I5Z�V�\ ¬�Q:¤�G_�JO�p ?_@ []GJV ÐMLU�k��KFCFEH´_O ? V�Z]o� S§�V��uY�I5CWU_[6[�GSV�I5Z�V�\([�GSV�Z]V^V�§�CFOm[ �& � , � � � O]�SEHGu[�GjMb[

�& � , ��© �& � ¬�Q£gÞ[®E�MbU ? V;V�MLO�CFK @ EHGJV�EH´LV��u[]GjMb[ �& � CFO®M�E�I5UAeLV�§�CWa @ CFUSo¯O�I�E�CNMLK|MLO @ \&\^V�[�Z]CWE£V��_�JCWKFC ? Z]CF�S\a�I5Z�D�Q

� � � ��2:)*� ����������)*��7 � )�������)�,

B�Ib[�CFE�V:[�GjMl[ ? IL[]G [�GJV�I5Z]V�\^O£CWU ��V�E�[�CFILUJO �JQWv.MLUS� �SQÔx�MLZ�V�I ? [HMbCFUJV��¢a�ILZ�CFUA[�V�Z]CW\ V�§�Y�V�E�[�V���S[�CWKFCf[ @

a��JUJE�[�CWI5UJO�p�MLUJ�$[�GSCFO%CWO�[�GSV �iM @ V�O�CNMLU�a�Z]ML\^V��nILZ]´��`GJV�Z�V;MLo5V�UA[]O�Z]V�E�V�Cfe5V;M:O]CWo5UjMLK-MLO%[]I �`GjMb[®CWO�[�GSV

V�eLV�UA[^CFU [�GJV�CFZ£YjMbZ�[�Cf[�CWI5U��`GJCWEHGE�I5UA[HMLCWUJO�[�GJV�Z�V�MLKWCF��V��¢O�[HMl[�V�ILa�UjMb[]�JZ]VbQ ¤�G_�JO�piMLoLV�UA[�O;E�ILUJ�JCW[]CFI5U

[�GSV�CFZ�V�§�Y�V�E�[�V����S[]CFKWCW[ @ I5U&[�GJV/V�e5V�UA[i�`GJCFEHG�E�I5UA[HMLCWUJO0[�GJV%Z�V�MLKWCF��V�� Om[HMb[]V/ILa�UjMb[��SZ]V%MbUJ�:�JY��jMb[]V�[�GSV�CFZ

YJZ�CFI5Z�O��JO]CWUJo��iM @ V�O��3Z]�JKWVLQ�ghU¦[�GSCFO�O]V�[6�JY�[�GJV¯©ÒCWUA[�V�Z�CF\ ¬DE�I5UJ�JCf[�CFILUjMLK|Vͧ�Y�V�E�[�V����S[]CFKWCW[ @ �JV�Y�V�US�JO ILU

[�GSV£Z]V�MbKFCF��V���Om[HMb[]V£ILa�UjMb[��SZ]V;MLUJ��[]GJV;MLZ]oL�J\^V�UA[�O%Z�V��_�JCFZ�V��¦[�I�YJZ�I�e5V;¤�GJV�ILZ]V�\&O£v;MLUJ��x�MLZ�V£M ? CW[

�JCf�qV�Z]V�UA[i[]GjMLU []GJV%Vͧ�MLUA[�V/E�MLO�V/�nV�E�I5UJO�CF�JV�Z ? V�KFI��®Q*ghU:[]GJV%V�§:MLUA[�V/E�MLO�V%[�GJV�Z]V%CWOnUJI£O�CFo5UjMbKFCFUSoµMLUS�

MLo5V�UA[�OµCWUA[�V�oLZ�Mb[]V&[]GJV�CWZµ�S[]CFKFCf[ @ a��JUSE�[�CWI5U�I�eLV�Z£MLU @ Y�I5O]O�C ? KWV^Om[HMb[]V ILa�UJMb[��JZ�VLQ.¤�G_�JO�p*[]GJV�©�V�§�MLUA[�V�¬

V�§�Y�V�E�[�V���S[�CWKFCf[ @ �JI�V�O�U�� [^�SV�Y�V�UJ� I5U [�GJV�Om[HMb[]V�O&ILaDUjMb[��SZ]VLQ¢ghU¢YjMLZm[�CWE��JKFMLZ�p G1��>�>)( ��F�G >�>)( ��>EC�G >�4ING B19 B1G�2 � �* z�� - $ �( - $ �( � �[� CWO��JV jUSV��$MbO

� �*�©��3( �& (h&�G�¬Y" � S E-©��3( �&-©PKn¬�(�&�Gm©PKn¬�¬ � �0©PKn¬34��VTE�MLU UJI��¢�JV JUJVT[]GJVnE�I5Z]Z�V�O]Y�I5UJ�SCFUJo�UJIL[�CWI5U6ILaÐX%V JUJCW[]CFI5U��JQfvTa�I5Z3[�GSVTVͧ�MbU_[]VnVͧSY�V�E�[�V��£�S[�CWKFCW[ @ Q

��������� � ��� � ��� � � U���>)( ��F�G > � @ ;LC�BH��9 >��mINB19 BHlm�3B1I A#a�I5Z D CFO®M�O�[]Z�Mb[]V�o @ YJZ]I JKFV �& , $ �( O]�JEHG [�GjMb[

v�t

Page 17: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

a�I5Z�� + p�4 -c4fp©ÒCN¬ �&�, $ �� ©��3( �&�¬ " $\*W, $ �( � z]*q©��3(�Kn¬ ,�£©��3(�K�( �&�¬ �9+ p�4.-c4 25(ÐMLUS�©ÒCWC~¬ � �*£©��3( �&)( �&�G²¬o"<\ M�§

��� �

� G�� >� " � �*�©��3( �& (�A¬�4

��� � � � % � �6r�V�[ D ? V£M:O�I�E�CNMLK³O @ Om[�V�\ �`CW[�G¦MbO @ \^\&V�[]Z]CWE CWUSa�I5Z]\^Mb[]CFI5U.O�Mb[]CFOma @ CWUJo¦© � Qfv�¬`k © � Q �_¬�Q

¤�GJV�U¯[�GSV�Z]V®VͧSCWO�[]O�MbU¯Vͧ.MLUA[�V®O]I�E�CFMLK�V����SCFKFC ? Z]CW�J\¥CFUBD�Q

�+;L;'&µ¤�GJV^CW�JV�M�ILaT[�GJV&YJZ]I�ILanZ]V�\^MLCWUJO®V�O]O�V�UA[�CFMLKFK @ [�GSV^O]ML\^VbQ���IL\^V;\&I��JC jE�Ml[�CFILUJO®MLZ]V;Z�V��_�JCFZ�V���Q��V6IL�S[�KWCFUJV/[]GJV6MLZ]oL�J\^V�UA[�Q

X%V jUSV $ �� z��/- $ �( � x ��� C � " ?A@

$ �� ©��3( �&�¬o"a$\*W, $ �(�� z]*q©��3(�Kn¬ ,M£©��3(�K�( �&�¬ �9+ pJ4.-c4 254� @ [�GJV�\&V�MLO��JZ�M ? CFKWCW[ @ KFCfa~[�CWUJoD[]GJV�ILZ]V�\ a�I5Z|V�MLEHG �§SV�� �&�, $ �( ( $ �� © " ( �&Ь|GjMLO�M�\&V�MLO��JZ�M ? KFVnoLZ�MLYJG&MLUS�?A@ PnI5Z�I5KFKFMLZ @ ��QÖt£CFU RTMLUJUSV�KFCWO6©mv�ªLªSv5pSYqQ�x�v�¬�p�a�I5Z�V�MLEHG� S§�V��9�8, � ( $ �� ©��3( " ¬�CFO6©��TV�Mb´�K @ ¬�E�I5UA[�CWU��SI5�JO�QgÞ[Da�I5KFKWI��`O�a�Z�I5\ [�GJV � �J\^MLUJU¯\^V�MLO]�SZ�M ? KWV O�V�KWV�E�[]CFI5U�[�GSV�I5Z�V�\ [�GjMl[ $ �� CFO`UJI5USV�\&YS[ @ eLMbKF�JV�� ©ÒZ�V�E�MLKFK[�GJMb[ GjMLODM£\^V�MLO]�JZ]M ? KWV�o5Z�MLYSGЬ�Q

X%V jUSV®[]GJV®E�I5Z�Z]V�O]Y�I5UJ�JV�UJE�V�� z�� - $ �( � x ��� C � " ?A@

� ©��3( �&�¬ "a$\*k, $ �� ©��3( �&q¬nz � �*;©��3( �&)(+*S¬ " \ Ml§��� �

� G�� >� " � �*;©��3( �&)(�A¬E254

� O ? V�a�I5Z�VLpÐa�I5Z`V�MLEHG �§SV���� , � (�� ©��3( " ¬iCWO`�TV�Mb´�K @ ��QÖO�QÖEbQ`MLUJ�.a�I5Z�V�MLEHG S§�V�� �&r, $ �( (��^© " ( �&�¬�GjMLO�M\&V�MLO��JZ�M ? KFV`o5Z�MbYJG�Q�j�JZm[�GJV�Z]\&I5Z]Vbp � CWO�USI5UJV�\&YS[ @ MLUJ�^E�I5UAeLV�§^eLMbKF�JV���Q�X%V JUJVD[]GJV/E�I5Z]Z�V�O�Y�I5US�JV�UJE�V

�¥z $ �( � x � �� ?A@ ��© �&q¬6" $ �*_, $ �( z �*�©���¬V, �^©��3( �&�¬ � + p�4.-c4 254 � @ [�GJV&��Q�O�Q�ELQ:KWCWa~[�CWUJo []GJV�I5Z�V�\© � YJY�V�UJ�JCܧJ¬ �9CWO&�TV�ML´_K @ �qQÖO�QÖEbQ¡�`Cf[�G E�I5UAe5Vͧqp`UJILUJV�\&YS[ @ ebMLKF�JV�O$©�Z]V�E�MLKWK � �J\^MLUJU���O^\&V�MbO]�JZ]M ? KFV

v�«

Page 18: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

O]V�KFV�E�[�CWI5U¦[�GJV�I5Z]V�\:¬®MLUJ� I ? e�CFI5�JO�K @ p � \^MLYJO®Y�I5CFUA[]O6a�Z�I5\�M��nV�ML´_K @ E�I5\&YjMLE�[ ©²X%CFV�O�[]V�K{��O�[�GJV�I5Z]V�\:¬

E�ILU_eLV�§�pSUSI5UJV�\&YS[ @ O�V�[ $ �( CWU_[]I®O]V�[]O0ILaqO�� ? O�V�[�O�ILa $ �( Q�� @ [�GSV ÐMLU�k��KFCFEH´_O ? V�Z]o S§�V��^Y�I5CFUA[�[]GJV�I5Z�V�\[�GSV�Z]V6V�§�CWO�[ �& � , $ �( O��JEHG¯[]GjMb[ �& � , ��© �& � ¬�Q0gÞ[`E�MbU ? V®V�MLO�CFK @ EHGJV�EH´bV�� []GjMb[ �& � CWO`MLU¯Vͧ.MLUA[�V®O�I�E�CNMLKV��_�JCWKFC ? Z]CW�J\¥a�ILZ�D 4

� ��� �� 7��= �/�49 ! ��7�� �� �� # ���� ��7=#+ ��� �� #% ��� #������ # ! �

��V/�`CFKWK�UJI��¡O]GSI��¡[�GJMb[ ?A@ CW\^Y�I5O]CWUJo6E�I5UJ�SCW[�CWI5U¦© � QË�5¬�p�C{Q�VLQfpS\^MLU @ \&I5Z]V/MLo5V�U_[]Oi[�GjMbU�O�[�Z]Mb[�V�o5CFV�On�TV

E�MbU¯�JCWO]Y�V�UJE�V��`CW[�G�[]GJV®E�I5UJE�M�e�Cf[ @ MLO]O��J\&YS[�CWI5U�I5U�[�GJV®�S[]CFKFCf[ @ a��SUJE�[]CFI5UJO�Q0¤�G��SO�pj[�GJV®E�I5�JUA[�V�Z]YjMLZm[DILa

¤�GJV�I5Z]V�\ x�a�ILZi[�GJV®V�§¯MbU_[]V®E�MLO�V6E�MLU ? V®I ? [�MLCFUSV���Q

��V jZ�O�[DUJV�V��¯[]GJV�a�I5KFKWI��`CFUJo��SV jUJCf[�CWI5U�z

��������� � ��� � � �jz � U�>)(#��F�G >XCE;!F�C�>)(cB & 2!B1FN� @ ;LC�BH��9J>��mI B19 BHlm�3B1INA�a�ILZ D.CWO�M%O�[]Z�Mb[]V�o @ YJZ]I jKFV �& ��, � � � pC{Q�VLQfpÐ[�GJV�Z]VµVͧ�CFO�[ �&|©���¬�, $ �( � (�� + p�4 -c4 (�� � �&M" �& ��p�O]�JEHG$[]GjMb[�p�a�I5Z�� + p�4.-c4�E�I5UJ�JCf[�CFILUJO�©�C~¬`MLUJ�u©ÒCFCN¬iILa�JV jUJCW[]CFI5U¯��Q �SQ�GJILKF��Q

��� � � � % ���^r�V�[ D ? V^M¯O�I�E�CNMLK�O @ O�[�V�\��`Cf[�G�MLO @ \&\^V�[�Z�CFE;CFUSa�ILZ]\^Mb[�CWI5U�O�Mb[]CFOma @ CWUJo�© � QWv�¬Íp�© � QËx5¬�p

©²M5¬�p�© ? ¬�p�©Ò�ЬÍp�© � Q �5¬`k6© � QË�5¬�Q�¤�GJV�U¦M:E�I5UAeLV�§�CWa @ CFUSo�V�§¦MbU_[]V�O]I�E�CFMLK-MLO @ \&\^V�[�Z]CWE V��_�JCFKWC ? Z�CF�J\ VͧSCWO�[]O

CFU Do4

�+;L;'&0��V�I5�S[�KWCFUJV�[�GJV ? MLO�CFE�MbZ]o5�J\&V�UA[�QTX%V jUJV%[]GJV®E�I5Z�Z]V�O�Y�ILUJ�JV�USE�V $ �� z �/- � � �d� x ��� C � " ?A@

$ �� ©��3( �&�¬o"a$\*W, $=�( � z]*q©��3(�Kn¬ ,M£©��3(�K�(h&�¬ �9+ pJ4.-c4 254¤�GJV�U.a�I5ZnV�MLEHG� S§�V�� �& , � � �M( $ �� © " ( �&ЬnGjMLO`M�\&V�MLO��JZ�M ? KFV%o5Z]MLYJG.MLUJ��a�I5ZnV�MLEHG� S§�V��9�8, � ( $ �� ©��3( " ¬

v�w

Page 19: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

CFO6�nV�ML´_K @ E�I5UA[]CFU_�JI5�JO�p�E�I5UAeLV�§�Qj�JZ�[]GJV�Z�\^I5Z�VLp $ �� © " ( " ¬�UJI5USV�\&YS[ @ ebMLKW�JV��qQ X%V jUJV []GJV:O]V�[�k{eLMbKF�JV��a��JUJE�[�CWI5U � z�� - � � � x ��� C � " ?A@

� ©��3( �&�¬ "a$\*k, $ �� ©��3( �&q¬nz � �*;©��3( �&)(+*S¬ " \ Ml§��� �

� G�� >� " � �*;©��3( �&)(�A¬E254

jI5Z�V�MbEHG S§�V�� �8,�� (��^©��3( " ¬qCFO��TV�ML´_K @ ��QÖO�QÖEbQWpLUJI5UJV�\^YS[ @ ebMLKW�JV�� MLUJ�®a�I5Z3V�MbEHG� S§�V�� �&�, � � �M(�� © " ( �&�¬GjMLODM£\&V�MLO��JZ�M ? KFV�o5Z]MLYJG�Q�X%V JUJV�[�GJV®E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V��¡z � � � � x � � ( ?A@ ��© �&�¬ " � � �^©��3( �&�¬ÍQ� O�UJIL[]V�� V�MLZ]KWCFV�Z�CFU;[�GJVDYJZ]I�ILa�ILa�¤�GSV�I5Z�V�\9x�p � � � CWO0�TV�Mb´�K @ E�I5\&YjMLE�[�p_E�ILU_eLV�§�pjMLUS�^UJILUJV�\&YS[ @ Q

j�JZ�[]GJV�Z�\^ILZ]VLp³[�GJV^E�I5Z�Z]V�O]Y�I5UJ�JV�UJE�V � CWO6�TV�Mb´�K @ ��QÖO�QÖEbQ UJILUJV�\&YS[ @ ebMLKF�JV��uMLUS� ?A@ ¤�GSV�I5Z�V�\ � CWU

[�GSV � YJY�V�UJ�JCܧqp�E�ILU_eLV�§¯ebMLKF�JV���Qi¤�G_�JO�p�[]GJV�Z�VµCFODM S§�V��$Y�I5CFUA[`�`GJCWEHG E�MbU ? V V�MLO]CWK @ EHGJV�EH´LV��¦[]GjMb[�CW[

CFO`MbU¯Vͧ.MLUA[�V®E�ILU_eLV�§�CWa @ CWUJo^O�I�E�CNMLKqV��_�JCFKWC ? Z�CF�J\ a�I5Z�Do4

� � �&2��38¥�&2��^� � :)*��� )*�/=;, ��/)�� ��� ����� :)���� )|�%=&�����

��Vµ�`CFKWK³USI�� O]GSI�� GJI�� E�I5US�JCW[]CFI5Uu© � QË�5¬�YSKNM @ O%MLU�CW\^Y�I5Z�[�MLUA[/Z�I5KFV®[�I�V�e5V�U �SCFO]Y�V�USE�V��`CW[]G [�GSV£MLOmk

O]�S\^YS[]CFI5U&ILa�E�I5UAe5Vͧ:ebMLKF�SV�� Om[�Z]Mb[�V�o @ E�I5Z�Z]V�O�Y�ILUJ�JV�USE�V�O�pjC{Q�VLQ|MLO]O��J\^Y�[�CFILU�© � QWv�¬�©ÒMA¬0E�MLU ? V�Z�V�YJKFMLE�V��

?A@

© � Qfv�¬

©ÒM $ ¬ � z �0- > � x ¡CFO;M$USI5UJV�\&YS[ @ p��TV�ML´_K @ E�I5\&YjMLE�[�ebMLKF�SV�� MLUJ�¢CFUA[]V�o5Z]M ? K @�? I5�JUJ�JV��

E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�VLQ

X%V�USIL[�V ?A@ ����© " ( " ¬�[]GJV @ >�G ;'& ��919 G'��>#>)(cGH�+>�Ak> ��;!B1F�G @ ;'&Y� © " ( " ¬�Q

v�ª

Page 20: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

X%V jUSV^[�GSV^O�V�[�O $ �(��� " $\*q©���¬V, � � ©�� (E��¬�zP*q©��3( " ¬µz�> � x CFO @�GFkh\&V�MLO��JZ�M ? KFV&MLUJ� *�©��3(�Kn¬ ,� � ©��3(�Kn¬ �,+ p�4.-c4 25(ÐMbUJ� $ �( � "a$ �*k, � � ©�� ( � � ©��b(E�µ¬�¬iz �*q©���¬ , $ �( �� � + p�4 -c4 254

X%V jUSV � � � � " $ � � �&z ��, $ �( � 2_Q��������� � ����� �� � � �jIN�E> @ GH����G >D� 2 @ ;LC�BH��9P� @ 2!A#Ak>�GH��BDCV>��mI B19 BHlm�3B1INA a�ILZ�D�CFO`M�Om[�Z]Mb[�V�o @ YJZ�I jKFV �& ��CWU� � � � p�C²QÖVbQWp_[�GSV�Z]VDV�§�CWO�[Y&-©���¬ , $ �( �� �#+ p�4 -c4 ( � � �& " �& � p�O��JEHG [�GJMb[�p_a�I5Z �#+ pJ4.-c4 (�E�I5UJ�JCf[�CFILUJO�©ÒC~¬�MLUS�©ÒCWC~¬TIba*X%V jUJCW[]CFI5U��SQÔx�Q�GSI5KF��Q

¤�GJVTa�ILKFKFI��`CWUJo�r�V�\&\ M�CWO3[]GJV�´LV @ Z�V�O]�SKW[-UJV�V��JV��µa�ILZ3[]GJV0YJZ]I�ILaSILaS[]GJVTVͧ�CFO�[]V�UJE�VnILaJMDYS�JZ]V�O�[]Z�Mb[]V�o @

O]I�E�CFMLK�MLO @ \^\&V�[]Z]CFE/V��_�JCFKWC ? Z�CF�J\.Q

� � %'%�� � � ��© IN�3B �8Ch��G BD;!F�¬Íz/r�V�[ D ? V£M:O]I�E�CFMLK³O @ O�[]V�\ �`Cf[�G¦MLO @ \&\&V�[�Z�CFE CFUSa�I5Z�\ Ml[�CFILU¯O]Mb[�CWO�a @ CFUJo

© � QWv�¬�p/©²M�$ά�p/© ? ¬�MLUS� © � QË�5¬�Q ¤�GSV�U � � E�I5U ���e"�� � ���e"�� � MLUS� []GJCFO£O�V�[&CFO��TV�ML´_K @ E�I5\&YjMLE�[�p

E�ILU_eLV�§ MLUJ��UJILUJV�\&YS[ @ Q

�+;L;'&³gÞ[�a�I5KWKFI��`Oqa�Z]IL\<[�GSVT¨�Z�V�CFU�k ;¯CWKF\^MLU�[]GJV�I5Z�V�\ ©�O]V�V0a�ILZ�V�§SML\&YJKFV � KFCFYSZ�MLUA[�CWOmk �n�JZ]´_CWUJO]GjM�� ©mv�ª5wA�5¬

I5Z`X%�JU�a�I5Z]��k ��EHGA�iMbZ]� ©mv�ªA�bwA¬]¬�[]GjMb[

E�I5U�� � ©��3(�Kn¬o" � ©��3(�Kn¬Ta�I5Z�� + p�4 -c4ÐMbUJ� �9+ p�4.-c4 © > ¬

B�Ib[�CFE�V�[�GjMb[^CFU e�CFV�� ILa£© > ¬;M ? I�eLVLpn[]GJV¯O�V�[ $ �E�I5U (��� "[$\*�©���¬ , � � ©�� (E��¬.z8*�©��3( " ¬�z > � x CFO

@�GFkh\&V�MLO��JZ�M ? KFV®MLUS� *q©��3(�Kn¬ , E�ILU � � ©��3(�Kn¬ �9+ p�4 -c4 25(jCFO�V��_�jMLK�[�I $ �(�� Q��CFUSE�V $ �( " $ �*r, � � ©�N( � � ©�� (E� ¬]¬6z �*�©���¬ , $ �( � � +.p�( 4.-c4 2k" $ �* , � � ©� ( � � ©�� (E�µ¬]¬6z �*�©���¬ ,

$ �E�ILU ( �� � + pJ4.-c4 2 " $ �E�I5U ( � pÐCW[`a�I5KWKFI��`Oi[�GJMb[ � � � " $ � � �&¦z �&r, $ �( 2K" � � E�I5U � � " $ � � �&¦z �& ,$ �E�ILU ( � 2_Q

xLy

Page 21: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

� @ ¤�GJV�I5Z]V�\ � CFU�[�GJV � YJY�V�UJ�JCܧqpJ�TV6GjM�e5V�[�GjMl[

��� E�ILU�� � " � ��� � (MLUJ�&[�GJV�Z]V�a�I5Z]Vbp � � � � " � � �M4�¤�GSV��TV�ML´&E�I5\&YjMLE�[�UJV�O]OnMLUJ� USI5UJV�\&YS[ @ UJV�O]Oia�I5KWKFI��[]GJV/O]ML\&VD�nM @ MbO

CFU�[]GJV®YJZ]I�ILa-ILa|¤�GSV�I5Z�V�\ x�Q

ghU�e�CWV��<ILa�[�GSV®M ? I�eLV®r3V�\^\^MµI5USV�E�MLU�V�MLO]CWK @ V�O�[�M ? KWCFO]G^[�GJV�VͧSCWO�[]V�UJE�V6Iba|M�YS�JZ]V�Om[�Z�Ml[�V�o @ O�I�E�CNMLK

MLO @ \&\&V�[�Z�CFE0V��_�JCWKFC ? Z]CW�J\¡a�ILZ'Do( ?A@ Z]V�Y�V�Mb[�CWUJoD[]GJV�O�ML\&VnMbZ]o5�J\&V�UA[³�JO�V��µ[]I�YJZ�I�e5Vn¤�GSV�I5Z�V�\ x�Q-B�IL[]CFE�V

[�GJMb[�UJI�E�I5UAe5V�§�Cf[ @ MLO]O��J\^Y�[�CFILU$CFO%USV�V��SV�� I5U$[�GJV£Om[�Z]Mb[�V�o @ O�V�[�O�Q�jI5Z�\ MLKWK @ �TV£GjM�e5V£[�GSVµa�I5KFKWI��`CFUJo

Z]V�O]�JKf[�Q

��� � � � % � ��r�V�[�D ? V�MµO�I�E�CNMLK�O @ Om[�V�\9�`CW[�G�MbO @ \^\&V�[]Z]CWE/CFU�a�I5Z]\^Mb[�CWI5U;O�Mb[]CFOma @ CWUJo�© � Qfv�¬�p�©²M�$ά�p3© ? ¬�p© � QÔxL¬�pЩÒMA¬�pЩ ? ¬�pj©Ò�Ь|MbUJ��© � Q �5¬3k�© � QË�5¬�Q-¤�GJV�U&M/YJ�SZ]ViOm[�Z�Ml[�V�o @ O]I�E�CFMLK�MLO @ \&\^V�[�Z]CWETV��_�JCFKWC ? Z�CF�J\ VͧSCWO�[]O

CFU Do4

� 89�&2��D����7���2$= � �� �µ����� �µ2�7 � ����2 � �$���³)����&2��

� ��Ðz-¤�GJZ]IL�Jo5GJI5��[�[�GJV�YjMbY�V�Z*�nV`MLO�O]�J\&V��;[�GJMb[*[�GSV�O�[HMl[�V�O]YJMLE�V�>¢CFO*E�I5�JUA[HM ? KFVLQ|¤�GJV`Z]V�MbO]I5U£a�I5Z|[]GJCFO

�nMLO�[�I®YJZ]I�eLV`[]GJV6©��TV�Mb´S¬*E�I5UA[�CFU_�JCf[ @ ILaÐ[�GSV�V�§�Y�V�E�[]V�� ��[�CFKWCW[ @ Q-gÞ[�[]�JZ]UJO0I5��[�[�GjMb[*CWa >CWO*�JUJE�I5�JUA[HM ? KFVLp

[�GSV�U�[�GJV®V�§�Y�V�E�[�V��¯�S[�CWKFCf[ @ CWO6©��TV�ML´_K @ ¬iE�I5UA[�CFU_�JIL�JO`CWa-MLUJ��I5UJK @ Cfa³[]GJV®�S[�CWKFCf[ @ a��SUJE�[]CFI5U�CFO`M��^USV ©�O]V�V

�iMLKW�JV�Zsk{RTMLUSUJV�KWCFOD©mv�ª5ª �A¬�¬�Q|gÞ[TO]V�V�\&OT[]GjMb[TCFU:MbU V�§�Y�V�E�[�V�����[�CFKWCW[ @ O]V�[T�JY�p�©ÒV�CW[�GSV�Z0CFUA[�V�Z]CW\#I5Z0V�§ MLUA[�V�¬

[�GSV%M�&UJV�KFCFUSV�MLZ�CW[ @ ILaq[�GJV��S[�CWKFCW[ @ a��JUJE�[]CFI5U^CFOTMµZ�Ml[�GJV�ZTOm[�Z]ILUJo£MLO�O]�J\&YS[�CWI5U:MbUJ�:CW[�CWOTKWV�O]OnMLE�E�V�YS[�M ? KWV

[�GJMLU.[]GJV6MLO]O��J\&YS[�CWI5U�ILa*M£E�I5�JUA[HM ? KFV®O�[�Mb[�V®O]YJMLE�VbQ

x�v

Page 22: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

� ��z³¤�GJVTO�[�Z]Mb[�V�o @ O]YjMbE�ViCWU [�GSCFO³YjMLY�V�Z-�nMLO|MLO]O��J\^V��µ[�I ? VTM/O]V�YjMLZ]M ? KFV �iMLUJMLEHG�O]YJMLE�VbQ ��V�YJMLZ�M ? CFKFCf[ @

O]V�V�\&O�[�I�YJKNM @ MLU¦CF\&Y�ILZ�[HMbU_[/Z]I5KWV£CFU$[]GJV£YJZ]I�ILa�O®MLO%[]GJV£\&V�MLO��JZ�M ? KFV£O]V�KFV�E�[�CWI5U�[�GJV�I5Z]V�\ CWO®MLYJYJKWCFV��

V�§�[]V�UJO�CWe5V�K @ Q gÞ[�CWOµUJIb[µE�KFV�MbZ GJI��¥I5UJV^E�MLU�o5I ? V @ I5UJ�u[�GSV O]V�YjMLZ]M ? KFV^E�MLO�VLQ¯¤�GJCFO O]V�V�\^O6[�I ? V:MbU

I5Y�V�U.�_�JV�Om[�CFILU�Q

� ����z0BDIL[�CWE�V%[]GjMb[i[]GJV®O]YjMLE�V®ILa³\^V�MLO]�JZ�V�I5U.M£E�I5\&YjMLE�[�\^V�[�Z�CFELp�V�UJ�SI��TV��.�`CW[]G:[�GJV��TV�ML´ ��[�I5Y�I5KFILo @

CFO`O�V�YjMLZ]M ? KWV6\&V�[]Z]CWELQ ��V�UJE�Vbp�Cfa|ILUJV®V�\&YJKFI @ O��nV�ML´ � \^V�MLO]�SZ�M ? KWV®O]V�KWV�E�[�CFILU�[]GJV�ILZ]V�\&ODMLO`�nV�KFK3MLO�[�GSV

�V�KWaÒMbUJ�:CFUA[]V�o5Z]Mb[�CWI5U�p_[�GJV�U�[]GJV%E�I5�JUA[�V�Z]YjMLZm[�O`ILa³MLKWK�[]GJV%[�GSV�I5Z�V�\&OiCFU:[]GJCFOiYJMLY�V�ZiE�MbU ? V�V�O�[HM ? KFCWO]GJV��

a�I5Z []GJV�O]YJMLE�V¦ILa6\&V�MLO��JZ]V�O�Q�¤�GJCWO�CFO:Iba CWUA[�V�Z�V�Om[�CFU I5Z��JV�Z:[]I V�§SML\&CFUJV$\&I��JV�KWO:ILa6\^ILUJI5Y�I5KFCWO�[�CWE

E�IL\^Y�V�[]CW[�CWI5U:I5Z��SCW��V�Z]V�UA[�CNMl[�V��.E�IL\^\&I��SCW[�CWV�O�Q

� � �³z gÞ[£CFOµ�TV�KWKi´_UJI��`U�©�O]V�V:a�I5Z�V�§SML\&YJKWVLp � Z�Z]I��iksX%V ? Z]V�� ©sv�ªA� �A¬]¬�p-[�GjMb[£[]GJV��JV�[�V�Z�\^CWUJCFOm[�CWE^O�I�E�CNMLK

V��_�JCWKFC ? Z]CW�J\ V�§�CFOm[�V�UJE�V�[]GJV�I5Z�V�\ E�MLU ? V£�JO]V���[�I:YJZ�I�e5V�[�GSV£V�§�CFOm[�V�USE�V£ILaTM^��MLKFZ]MLO]CFMLU$V����SCFKFC ? Z]CW�J\.Q

� UJV&E�MLU a�I5KFKWI�� [�GSV O�Mb\^V;CF�SV�M.[]I¯�SO]V^[]GJV&Z]V�O��JKW[]O Ibai[�GJCWO®YjMLY�V�Z®[�I YSZ]I�e5V^V�§�Y�V�E�[]V��uI5Z��iM @ V�O]CFMLU

��MLKFZ]MLO]CFMLU£V��_�JCWKFC ? Z]CF�S\ [�GSV�I5Z�V�\&O0a�ILZ�V�E�I5USI5\^CWV�O*�`Cf[�G^MLO @ \&\^V�[�Z]CWE�CFUSa�ILZ]\^Mb[�CWI5U£MLUJ�&�`CW[]G^M®E�ILU_[]CFU�k

�J�J\ ILa�MLo5V�U_[]O�Q�gÞ[TCFO�I5�JZ0E�ILU � V�E�[��JZ�V�[�GJMb[�p ?A@ �SO]CFUSo6[]GJV�[]GJV�I5Z�V�\&OTCWU&[]GJCFO�YjMLY�V�Z�p�[]GJVDZ]V�E�V�UA[iZ�V�O��JKW[]OILa�PnI5Z]UJV�[�kÞ¤-I5Y�I5���¦©�a�I5Zm[�GJE�I5\&CFUJo_¬-MLUJ� �nMLKF�JV�Z�©{xLy5y �_¬*E�MLU ? VDV�§�[�V�UJ�JV��:[�I6E�I�e5V�Z�MLO @ \&\^V�[�Z�CFE�CFU�a�I5Zmk

\^Mb[�CWI5U�Q ;¯I5Z�V�I�e5V�Z�pq[]GJV��nM @ V�O�CNMLU$��MLKFZ]MLO]CFMLU.V��_�JCFKWC ? Z�CF�J\9V�§�CFOm[�V�UJE�V�[]GJV�I5Z�V�\&O/CWU��iMLKW�JV�Zsk{RTMLUSUJV�KWCFO

©{xby5yA�5¬Íp �-I��JE���V�EH´5k²RTMLUJUJV�KFCFO ©²xLy5yA�5¬TMLUJ� �-I��JE���V�EH´5kh¤³I5�JZ�´ @ k²RTMLUJUJV�KFCWO®©{xLyLyA�5¬TE�MLU ? V�Vͧ�[]V�UJ�SV��¯[]I&M

E�ILU_[]CFU_�J�J\ ILa*Mbo5V�UA[�O�Q � O�[�GJV®\&I5\^V�UA[i[�GJCWO`O]V�V�\^O�[]I ? V6MLU.I5Y�V�U����SV�O�[]CFI5UqQ

x5x

Page 23: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

� + � ���%2�7�� �

¤�GJV^Z]V�O��JKW[]O ? V�KWI��#GjM�e5V ? V�V�Uu�JO�V��uCWU []GJV^YSZ]I�ILa�ILanI5�JZ6\ MLCWU�[�GJV�I5Z]V�\¯Q:��V Z�V�a�V�Z®[�GSV^Z�V�ML�JV�Z []I

RTMLUJUSV�KFCWO �Üv�ª5ªSv���a�ILZ�\^I5Z�V%�JV�[HMLCWKFO`MLUJ��a��JZm[�GJV�Z�Z]V�a�V�Z]V�UJE�V�O�Q

��#�%�� ����� � �J�$#³���J��� ��� � � � �L� ��� ��� � � � % ���)>�G�©�� ( � (��3¬�l�>���CE;!A��j9<>�G > � F�B1G >�Ak>h� @ IN�+> @ ���NCE>� l�> � CE;!A��j9<>�G > @ > �������]lm9<>�Ak>�GH��BDC @ ���NCE>K��F54#��z�� � x l�>V�kF ;!F >�A��jG�2 C!��9 I�>�4 CE;!�3�E> @ ��;!F54N>�F CE>=oB1G1�M�iAk>h� @ IN���]lm9<>�����������YB �H>��� �K�#,:�Vq gT© ��¬34�� ��>�F�G1��>��+> B @ �iAk>h� @ IN���]lm9<> &3I F C�GHBD;!F�� z � � �

@ I�CE� G'����G��*©���¬ ,:�-©���¬*�9+ pJ4.-c4� �� ��� � ���f� ��� � � � % ���)>�G�©�� (�� (���¬�l�>���CE;!A��j9<>�G > � F�B1G >�Ak>h� @ I �+> @ ���NCE>J� l�>�� @ > �������]lm9<> /���Fj�NCE�@ ���NCE>^��F54e��z1� � x ( l�>#��F B1F�G >D������91932 l�;!INF54N>�4��CE;!F�C�>)(� = >h� �!932 CE;!A����NC�G8��F54 F ;!F >�A��jG�2OC!��9 I�>�4CE;!�3�+> @ ��;!F54N>�F CE>���� ��>�F $ �� B @ = >h� �!932iCE;!A����NC�G B1F � � ©�� (h�¦¬�� �+;L;'& ��V�V�RTMLUJUJV�KFCWO �Üv�ªLªSv��²Q

� ������� � � � � � � ��� ��� �� � � % �ir�V�[ � ? VDM®O�V�YjMbZ�M ? KWV`O]YjMLE�VLpq©?>X(F@ (��3¬ ? VDM®E�I5\&YJKFV�[�V jUSCW[�V�\&V�MbO]�JZ�VO]YJMLE�V�MbUJ�_� z'> � x ? V:MLU�CFUA[�V�o5Z�M ? K @¦? I5�JUJ�JV���p*UJILUJV�\&YS[ @ p|E�I5UAe5VͧuebMLKW�JV��uE�I5Z]Z�V�O�Y�I5US�JV�UJE�V

O]�SEHG [�GjMl[Da�ILZ�MbKFK K , >X(h�¢©PKn¬iCFODM£�nV�ML´_K @ E�I5\&YjMLE�[�pjE�I5UAe5V�§ O]� ? O]V�[%ILa � QiX%V�UJIL[�V ?A@ $ �( [�GJV6O]V�[

$L& , � � ©�� (E� ¬/z�&-©UKn¬�,_� ©PKn¬ � + pJ4.-c4 2_Q�r�V�[���z+> - $ �( � x ¢? V�M USI5UJV�\&YS[ @ pqE�KWI5O]V���p�E�I5UAe5V�§

ebMLKF�SV��:E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�V6O��JEHG�[�GjMl[��|©UK�(h&�¬ `7� ©PKn¬�a�I5ZiMbKFK-©PK�(h&�¬ , >7- $ �( 4 � O]O��J\&V%[�GjMb[na�I5ZnV�MLEHG S§�V�� &�, $ �( (3�-© " (�&�¬nGjMLODM£\^V�MLO]�JZ]M ? KWV�o5Z�MLYSG¯MbUJ�.[]GjMb[�a�I5Z�V�MLEHG� S§�V�� K , >X(��|©PK�( " ¬Tz $ �( � x

CFO��qQÖO�QÖEbQnCFU�[]GJV®O]V�USO]V []GjMb[�[]GJV O�V�[�$L&�, $ �( z �-©PK�(h&�¬ `sQ�2 CFO��TV�ML´_K @ I5Y�V�U.CFU $ �( a�I5Z�V�eLV�Z @ UJILZ]\

x��

Page 24: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

I5Y�V�U.O]� ? O]V�[XQ�ILab�^Q�X%V jUSV®[]GJV®E�I5Z�Z]V�O]Y�I5UJ�JV�UJE�V �¡z $ �( � x � �� ?A@

��©'&�¬ "a$\*k, $ �( z]*�©UKn¬ ,r�|©UK�(h&�¬%�9+ pJ4.-c4 254¤�GJV�U �#CFO6�nV�ML´_K @ ��QÖO�QÖEbQWp�C{Q�VLQfp*[�GSV�O]V�[k$L&/, $ �( z ��©'&�¬W` Q�2.CFO6�nV�ML´_K @ ILY�V�U CFU $ �( a�ILZ�V�eLV�Z @

�TV�ML´_K @ I5Y�V�U¯O�� ? O�V�[XQ#Iba $ �( Q �+;L;'& ��V�V�RTMLUJUJV�KFCWO �Üv�ªLªSv��²Q

� � �j�$#3�l�S� � � � ��� � � � � �� � ��� � � � % z-r�V�[o�¡MLUJ� � ? VnO]V�YjMLZ]M ? KFV �iMLUjMbEHG�O]YjMbE�V�O�p_MLUJ��©�� (�� (��J¬-MLUS�©?>X(�@M(���¬ ? V jUJCf[�V�E�I5\&YJKFV�[�V�O]V�YJMLZ�M ? KFV/\&V�MbO]�JZ�V%O]YjMbE�V�O�Q�r3V�[���z � - > -��a� x ? V�MµUSI5UJV�\&YS[ @

ebMLKF�SV��.E�I5Z�Z]V�O�Y�ILUJ�JV�USE�VLQ ���JYJY�I5O]V®[�GJMb[`a�I5Z`V�MLEHG *W, �^p��|© " ( " (+*S¬�GJMLO/M;\&V�MLO��JZ�M ? KFV�o5Z]MLYJG�QTX%V jUSV[�GSV6E�I5Z]Z�V�O�Y�I5US�JV�UJE�V�� z8> - �a� x���� C � " ?A@

�/©��3(h*J¬ " $L&-©���¬8, � � ©�� (+�µ¬izc&-©��3(�Kn¬ ,��|©��3(�K�(+*S¬ �9+ p�4 -c4 254¤�GJV�U¯a�I5Z�V�MLEHG *k, �e(��/© " (+*S¬TGjMLODM£\^V�MLO]�SZ�M ? KWV�o5Z�MbYJG�Q �+;L;'& ��V�V��iMLKW�JV�Zsk{RTMLUJUSV�KFCWO�©sv�ª5ªSv�¬ÍQ

X%V�UJIb[�V ?A@ ��� ©�S¬-[�GJV�O�YjMLE�V�Iba�Z�V�MLK�eLMbKF�JV��£\^V�MLO]�JZ]M ? KWVLp5V�O]O]V�UA[�CNMbKFK @ ? I5�JUJ�JV��£a��JUJE�[]CFI5USO��JV�Z�CWe5V��I5U ©�� (���(��J¬ÍQ jI5Z®MLU @ � , � [�GJV&\&V�MLO��JZ]V;O]YJMLE�V$©��e( � � (�� � ¬%CFO®UjMb[]�JZ�MbKFK @ �JV jUJV��qp�MLUJ� O]I.CFO�[�GSVO]YJMLE�V ��� � � ©��Ь " $��¦z �a�[� ( ��CFO � � kh\&V�MLO��JZ�M ? KFV�MbUJ� � � khV�O]O]V�UA[�CNMbKFK @^? I5�JUJ�JV�� 2_QjI5Z%MLU @ e5V�E�[�ILZ�O]YjMLE�V£I�e5V�Z�[�GJV�Z�V�MLK jV�KW��MLU¦MLKWo5V ? Z�MLCWE © �/ML\&V�KN¬ ? MLO]CWO%V�§�CFOm[�O�Q�¤�GJV£E�MLZ��JCFUJMLKFCf[ @

ILanMLU @ �/Mb\^V�K ? MLO�CFO�CFO%[]GJV;O�ML\&VLp³MLUS� �SV�UJIL[]V£a�I5Z®MLU @ e5V�E�[]I5Z O�YjMLE�Ve�&p3�JCF\.� [�GJV;E�MbZ]�JCWUjMLKFCf[ @ ILa

MLU @ ILa-CW[]O ? MLO�V�O�Q

x �

Page 25: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

��� � � � % � ©�� ;!F�C�>)(cB & 2B1FN� >��X>EC�GF¬�zDr�V�[�� ? V�M �TV�Mb´�K @ E�I5\&YjMLE�[/O]� ? O]V�[®Iba�M �iMLUjMbEHG�O]YjMLE�V#� p

MLUJ��KWV�[ � z�� � x�� ? V�M KFI��nV�Zi\&V�MLO��JZ�M ? KFV/E�KFI5O�V��:ebMLKW�JV��:E�I5Z]Z�V�O�Y�I5US�JV�UJE�VLQ ���JYJY�I5O]V�[�GjMb[na�I5ZiMLU @

YjMLCWZ6©]©�� (�� (��S¬�(E�µ¬nCWa � ,�� (��q©���¬'& y�pS[�GJV�U¯�SCF\ � � � � ©��J¬'& �JCW\ � Q

¤�GJV�U ���:" � E�ILU � (³©��`GSV�Z]V E�ILU.�SV�UJIL[]V�O�p�E�KFI5O�V��.E�I5UAeLV�§�G_�JKFKN¬�Q

�+;L;'& ��V�V ±`�JOm[�CFEHGSCFUJCÜk{RTMLUJUSV�KFCWO�©sv�ª5ªSv5p ; MLCFU�[]GJV�I5Z�V�\ ¬�Q¤�GJV�[�GJV�I5Z]V�\ M ? I�e5V�CWO�MLU�CFU JUJCW[]V/o5V�UJV�Z]MLKFCW��Mb[]CFI5U^ILa³¤�GJV�I5Z�V�\ ��CWU � �J\^MLUJU ©sv�ª5t �A¬�Q*gÞ[`O�GJI5�JKW�

? V�UJIL[�V���[�GjMb[n[�GJV®MLO�O]�J\&YS[]CFI5U []GjMb[ ��CWOiKFI��TV�Z�\&V�MLO��JZ�M ? KFV%MbUJ��E�KFILO]V���ebMLKW�JV���CW\^YJKWCFV�O�[]GjMb[���GjMbO

M£\^V�MLO]�SZ�M ? KWV�o5Z�MbYJGu©�O]V�V®a�ILZ�V�§SML\&YJKFV6PiMLOm[HMLCWUJobk ��MLKNML�SCFV�Z%©mv�ª5«5«5¬]¬ÍQ

X%V jUSV®[]GJV®\ MbYJYJCFUSo � z � � ©� (h�¦¬o� � ?A@ �%©1&�¬ " � � &-©���¬ � ��©���¬�(�� CFO�KFCWUJV�MbZ�MLUJ�.UJI5Z�\ E�ILU_[]CFU�k

�JI5�SO®MLUJ�$[�G_�JO%�TV�Mb´�K @ E�ILU_[]CFU_�JI5�SO;©²X%�JU�a�I5Z]��k ��EHGA�iMbZ�[��¯©sv�ªA�LwSp�Y�Q �_x5x5¬�¬�Q6X%V�UJIb[�V ?A@ $ �� [�GSV�O]V�[®ILaMLKWK �nI�EHGJUJV�Z�CWU_[]V�o5Z]M ? KWV%O]V�KFV�E�[�CWI5UJO�a�Z]I5\¥[�GJV®E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�V � z �s� x)(/pjC²QÖVbQWp

$=�� "a$\*W, � ©�� (h� ¬nz]*q©���¬ , �i©���¬ � + p�4 -c4 254¤�GJV%CWUA[�V�oLZ�MLKÐILa ��CWO �/© $ �� ¬o"a$ �/©'&�¬iz�&M, $ �� 26" ��� 4�ghU e�CFV���ILa�[�GSV�M ? I�eLVLp�[�GJV%Z�V�ML�SV�ZnE�MLU:V�MLO]CWK @

E�ILUJE�KW�J�JV`[�GjMb[�[�GSV�E�I5�JUA[�V�Z]YjMLZm[�OTILaq[]GJV/��Q�O�Q�ELQ0MbUJ� \&V�MLO��JZ�M ? CFKWCW[ @ KWCWa~[]CFUJo/[]GJV�ILZ]V�\&O0a�I5Z�[]GJVDO]V�[TILa3MbKFK

�nI�EHGJUJV�Z|CFUA[]V�o5Z]M ? KFV0O�V�KFV�E�[]CFI5UJO³ILaÐMDE�I5Z�Z]V�O]Y�I5UJ�JV�UJE�Vbp_MLKFO�I�GJILKF� a�ILZ³[]GJVTCWUA[�V�oLZ�MLK_ILaÐM`E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�VbQ

¤�GJCWO^CWO;MLKFO�I []GJV¯E�MLO]V�a�I5Z£[�GSV��TV�Mb´ E�I5\&YjMLE�[]UJV�O�O ILaD[�GSV¯CWU_[]V�o5Z]MLK�ILa%M E�I5Z]Z�V�O]Y�I5UJ�SV�UJE�VLp�C{Q�VLQfp ?A@

X%CFV�O�[]V�K{��O�[�GJV�I5Z]V�\ CW[®a�I5KFKWI��`O®[]GjMb[ $ �� CFO��TV�ML´_K @ E�I5\&YjMLE�[�p|MbUJ��[]GJV�Z�V�a�I5Z�VLp �/© $ �� ¬�" � �Tp|C²QÖVbQWp3[�GSV

B1F�G >D���h��9 ;'& �7B @ ��9 @ ;�= >h� �!932WCE;!A����NC�G²Q��� � � � �l��� ��� &³� � � � � � � # � � � � � � � �� � � % z�r�V�[�©�� (���(��J¬ ? V M;E�I5\&YJKFV�[�V jUJCf[�V®\&V�MLO��JZ]V6O]YjMbE�VLp��

x5�

Page 26: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

? V;M:\^V�[�Z]CWE�O]YJMLE�V;MLUS� � ? V;M:O]V�YjMLZ]M ? KFV �nMLUjMLEHG¦O]YJMLE�VbQ£r�V�[ � z5�a- � � x ? V;M:UJILUJV�\&YS[ @ p

E�IL\^YjMbE�[�eLMbKF�JV�� E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V�O��JEHG:[�GJMb[Ta�ILZTV�MLEHG S§�V�� � ,�� (��/©��3( " ¬0CWOT�qQÖO�QÖEbQTMbUJ� [�GJMb[Ta�ILZTV�MLEHG , � (��%© " ( ЬTGjMLODM£\^V�MLO]�SZ�M ? KWV�o5Z�MbYJG�Q�¤�GJV�U � � �%©��3( " ¬nCWO���Q�O�Q�ELQ �+;L;'& ��V�V�RTMbUJUJV�KWCFO6©sv�ª5ªSv5pS¤�GJV�I5Z�V�\ tSQÖt;MLUJ�.±`V�\^MLZ]´�t�QWv�¬ÍQ

� eLV�Z]O�CFI5U�ILai[�GSV:M ? I�e5V^[]GJV�ILZ]V�\ a�I5Z®�nV�ML´5kh��Q�O�Q�ELQ MLKFO�I GJILKF�JO�p�©ÒO�V�V;RTMLUJUJV�KFCFO ©mv�ª5ªSv5p³¤�GJV�ILZ]V�\

��QË�5¬]¬ÍQ

xLt

Page 27: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

� �9 ����7��2�"

�Îv�� � KWCFYJZ]MLUA[�CWO�pjP/QÖX�Qfp �n�JZ]´_CWUJO]GjM��®p � QWz��³I5O]Cf[�Cfe5V � Y�V�Z�Mb[]CFI5U�p � E�ML�JV�\&CFE ��Z]V�O]Oµ©mv�ªLwA�5¬

��x�� � Z]Z�I��®p��SQfpAX%V ? Z]V���p�;Qfz³c|§SCWO�[]V�UJE�VDIba�MLU�V��_�JCWKFC ? Z]CW�J\�a�I5Z*M�E�I5\&Y�V�[�Cf[�CWeLVTV�E�I5USI5\ @ p�� CE;!F ;!Ak>�GH�3BDCh�

�p�xbtA��kmxbª5y�©mv�ªA� �_¬

� � � � �J\ MbUJU�p��SQ˱®Qfz�ghUA[�V�o5Z�MLKWO:ILa6O]V�[�k{eLMbKF�JV�� a��JUJE�[]CFI5USO�p���;!I �3Fj��9K;'&� ��G'��>�A���GHBDCh��9��Fj��932 @ B @ ��F548�]�j9 BDCh��GHBD;!F @ � �p�v�kHv�x�©mv�ª5tA�5¬

� � � �nMLKF�JV�Z�p�c�Q��SQWz � �JUJCfa @ CWUJo YjMLCFZ&ILa6PnIL�JZ]UJIb[�ksB�MLO]G V��_�JCFKWC ? Z�CF�J\ V�§�CFOm[�V�USE�V$Z�V�O]�SKW[�O�p ��;!I �3Fj��9X;'&� CE;!F ;!A#BDC � ��>E;!� 2;©{xLyLySv�¬

����� �iMLKF�SV�Z�p|c�Q��SQfz£c|§�CFO�[]V�UJE�V:ILaDPnIL\^Y�V�[]CW[�Cfe5V&c��_�JCFKWC ? Z�CNM�CFU�c�E�I5UJIL\^CWV�O®�`CW[�G�M8;¯V�MLO]�SZ]V���YJMLE�V^ILaPnI5UJO��J\^V�Z]O�MLUJ�¯PnI5UJO��J\&YS[�CWI5U.c*§�[]V�Z]UJMLKFCf[�CFV�O�p3©²xLy5y �A¬n�JUJYJ� ? KFCFO�GJV��qQ

� t � �iMbKF�JV�Z�p�c�Q��SQWp*RTMLUJUSV�KFCWO�p�B6QÔP/Qfz:c��_�JCWKFC ? Z]CF�S\(CFUuZ]MLUJ�JIL\ MLUS� �iM @ V�O�CNMLU¢oAMb\^V�O �`CW[]G¢M E�ILU_[]CFU�k

�J�J\ ILa�YJKNM @ V�Z�CFU ;�Q � Q3¨�GjMbU¦MLUJ� B Q3P/Q�RTMLUJUJV�KFCFO�©ÒV��JO�Qˬuc����SCFKFC ? Z]CW�J\ ¤�GJV�ILZ @ �`Cf[�G¦ghU jUSCW[�V

X%CF\&V�UJO�CFI5UJMLK�PnIL\^\&I��SCW[ @ ��YjMLE�V�O�p ��YSZ]CFUSo5V�Z�v�ªLªSv

«�� �iMLKW�JV�Z�pic�Q��SQWpTRTMbUJUJV�KWCFO�piB QËP/Qfz � U []GJV E�I5UA[�CFU_�JCf[ @ ILa%Vͧ�Y�V�E�[�V�� �S[�CWKFCf[ @ p�� CE;!F ;!A#BDC � ��>E;!� 2 ��ptAx5��kht � ��©sv�ª5ª �A¬

� w ���iMLKF�SV�Z�p�c�Q��SQfp�RTMbUJUJV�KWCFO�p�B6QÔP/Qfz �iM @ V�O]CFMLU ��MLKFZ]MLO]CFMLU¯V��_�JCFKWC ? Z�CF�J\.z � UJV�� MLYJYJZ�IAMLEHG []I Z�Ml[�CFILUjMLK

V�§�Y�V�E�[�Mb[�CWI5UJO`V��_�JCWKFC ? Z]CW�J\¯pq©{xby5yA�5¬

� ª �³PiMLOm[HMLCWUJoJpÐP/Qfp ��MLKNMb�JCFV�Z�Q ;�QfzTPnI5UAe5Vͧ¯MLUjMLK @ O�CFO`MLUS�¯\&V�MLO��JZ�M ? KFV%\µ�JKW[]CWa��JUJE�[�CWI5UJO�pSr�V�E�[]�JZ]V6BDIL[�V�OCFU ; Mb[]GJV�\^Mb[]CFE�O�p �0I5K²Q0�Lw5ySp ��YJZ]CWUJo5V�Zmk��0V�Z]KFMLoJpJBDV�� R�ILZ]´�©sv�ª5ªA«L¬

x5«

Page 28: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

�Îv�y �³PnI5Z�UJV�[�p �/QWpj¤³I5YJ�S����p ;�Qfz�c*§�CWO�[�V�UJE�V6ILa*c0�_�JCWKFC ? Z]CW�J\#a�I5ZDc0E�I5UJI5\&CFV�Oi�`CW[]G¯c|§�[�V�Z]UjMbKFCW[]CFV�O`MLUJ�¯M

;¯V�MbO]�JZ�V���YJMLE�V®ILa�PnI5UJO]�S\^V�Z]O�p � CE;!F ;!A#BDC � ��>E;!� 2;©~a�I5Z�[]GJE�IL\^CWUJo_¬�Îv5v���X�Mlks±`I�EHGjMSp nQ ;�QWp�¤-ILYJ�J���qp ;�Qfz�PnI5�JZ�UJIL[�khB/MLO�G�c��_�JCFKWC ? Z�CF�J\ CFU�PnILU_[]CFU_�J�J\ ®ML\^V�O��`Cf[�G B�I5U�k

� Z]�JV�Z]V�� ��Z]V�a�V�Z]V�UJE�V�O£©²xLy5yA�5¬

�Îv�x���X%V ? Z]V���p ;Qfz � O]I�E�CFMLKnV��_�JCFKWC ? Z�CF�J\�VͧSCWO�[]V�UJE�V.[]GJV�I5Z�V�\.p �+;LC�� 6��G 9�� �Ch� 4�� � C�B ��� � ����p

w5w5tlkhw5y ��©sv�ªA�5x5¬

�Îv � �-X%CFV�O�[�V�K{p �SQfp�d�GSK{p �SQWz �0V�E�[]I5Z/\&V�MLO��JZ]V�O�p>;¯Mb[�GJV�\ Ml[�CFE�MLK ���JZme5V @ O�p �0I5K{Q�v���p �Ak>�� � � ��G'� � � ;LC��Fp��Z]I�e�CF�JV�UJE�V&v�ªA«5«

�Îv � �3X%�JU�a�I5Z]��pJB Qfp ��EHGA�iMLZm[��bp �SQ�¤�QWz�r�CFUSV�MLZ � Y�V�Z�Ml[�I5Z�O�p �0I5K²Q*gHpjghUA[�V�Z�O]E�CFV�USE�VLp�BDV�� R�I5Z�´$v�ªA�bw

�Îv���� ��MLKFKWV�Z�p � Qfz �/? Om[�Z�MbE�[�c�E�I5UJIL\^CWV�Oi�`CW[]G.��CW�JV�O�YJZ]V�ML�¯c*§�[]V�Z]UJMLKFCf[�CFV�O6©mv�ªLª �A¬

�Îv�t �3¨�CF\.pS¤�QfpSRTMLUJUSV�KFCWO�pSB QËP/QWzTc|§SCWO�[]V�UJE�V ILa-V��_�JCWKFC ? Z]CW�J\ CFU��iM @ V�O]CNMbU¯oAMb\^V�Oi�`CW[�G�CWU jUJCf[�V�K @ \^MLU @

YJKNM @ V�Z]O�p �J;!IN�3Fj��9 ;'& � CE;!F ;!A#BDC � ��>E;!� 2 � � p � �5ylk �A����©sv�ªA«5«5¬

�Îv�«��3B�MLO]G�p �SQ nQfz�B�I5UJE�I�ILY�V�Z�Mb[]CWe5V�o5ML\^V�O�p �F�F � � ��G1� � � �3p�xLw5tlksxLªA��©mv�ªA��v�¬

�Îv�w �-B/MLO�G�p �SQ nQfziV����SCFKFC ? Z]CW�J\ Y�I5CWU_[]O�CWU¯U�khY�V�Z]O�I5U$oAMb\^V�O�p� �E;LC������GH9���XCh� 4�� � C�B ��� � � ��p �5wlk �Aª

©mv�ª5�LyA¬

�Îv�ª ���³I��JE���V�EH´�p*¨;Qfp�RTMLUJUJV�KFCWO�p3B QËP/Qfz c��_�JCWKFC ? Z]CF�S\ CWU¦�JCW��V�Z�V�UA[�CFMLK*CFU�a�I5Z]\^Mb[�CWI5U$V�E�I5UJIL\^CWV�O%�`CW[]G¦CFU�k

jUJCf[�V�K @ \^MLU @ E�I5\^\&I��JCW[]CFV�O�p�©²xLy5yA�L¬

��xLy � �³I��JE���V�EH´�p�¨£QWpj¤³I5�JZ�´ @ p�±6Qfp�RTMLUSUJV�KWCFO�pJB QËP/QWz ��Z]CfeLMl[�V�V�§�Y�V�E�[HMb[]CFI5UJO`V����SCFKFC ? Z]CFMSpq©{xLy5y5�5¬�Q

xLw

Page 29: ?A@web.econ.keio.ac.jp/.../takakofg/coeconfpapers/Yannelis.pdfO]Y I5UJ SV UJE V YJKFM @ MLU CF\&Y ILZ [HMbU_[iZ]I5KWVLQ ¤ GJV YjMLY V Z CFO ILZ]oAMLUSCF V 6MLO a I5KFKWI `O z ¤ GJV0UJVÍ

��x�v��6±`�JO�[]CFEHGJCWUJC � Qfp/RTMLUJUJV�KFCFO.B6QÔP/Qfz��GjMl[ CWO �³V�Zma�V�E�[�PnI5\&Y�V�[�CW[]CFI5Uqp/CFU ;�Q � QD¨�GjMLU MLUJ��B6QÔP/Q

RTMLUJUJV�KFCWO�p�c����SCFC ? Z]CF�S\ ¤�GJV�I5Z @ CFU ghU jUJCW[]V�X%CW\^V�UJO]CWI5UjMLK ��YjMLE�V�O�p ��[��J�SCFV�O�CFU c0E�I5UJI5\&CFE6¤�GJV�I5Z @

v5pÐx �5ªlkmxLt5��p�©sv�ª5ªSv�¬

��x5x�� ��EHGJ\&V�CF�SKFV�Z�pJX�Qfz�c��_�JCFKWC ? Z�CF�J\#Y�I5CFUA[]OnILa³UJI5U�ksMb[]I5\^CWE`oAML\&V�O�p � � � GD��G �� � 2 @ � � pjxLª5��k �5yLy:©mv�ªA«��A¬��x�� �Ф³I5�JZ]´ @ pS±®QWp5RTMLUSUJV�KWCFO�p�B6QÔP/Qfz ; MLZ�´LV�[�OT�`Cf[�G&\ MbU @ \^I5Z�V`MLo5V�U_[]O�[]GjMLU^E�I5\&\^I��JCf[�CFV�O�z � �J\ MbUJU���O

GJCF�S�JV�U¯MLO]O��J\&YS[�CWI5U�p ��;!IN��Fj��9b;'&���CE;!F ;!A#BDC � ��>E;!� 2 �����jp�v�w5ª�kmx5x�v£©{xLy5y�v�¬��x � �|RTMLUSUJV�KWCFO�p3B6QÔP/Qfz®ghUA[�V�oLZ�Mb[]CFI5U¦ILa �iMLUJMLEHG�kÞebMLKW�JV�� E�ILZ]Z]V�O]Y�I5UJ�JV�UJE�V�O�p-CFU c����SCFKFC ? Z]CW�J\ ¤�GJV�ILZ @ CWU

ghU jUJCf[�V.X%CF\&V�USO]CFILUjMLK ��YjMLE�V�O�p ; Q � Q0¨®GJMLU MbUJ� B6QÔP/Q*RTMLUSUJV�KWCFO�©/V��JO�Qˬ�p ��[��S�JCFV�O&CWU c�E�I5UJI5\&CFE

¤�GJV�ILZ @ p ��YSZ]CFUSo5V�Zsk��0V�Z�KNMLo�©mv�ª5ª�v�¬

��x5���%RTMLUJUSV�KFCWO�p/B QËP/QWz � �iM @ V�O�CNMLU<V��_�JCWKFC ? Z]CF�S\ VͧSCWO�[]V�UJE�V�[�GSV�I5Z�V�\.p #4 C!��F CE> @ B1F � ��G'��>�A���GHBDCh��9

� CE;!F ;!A#BDC @ �3pÐtSv�km«5x�©²xLy5yAx5¬

xLª