A Model of Competing Narratives
We formalize the argument that political disagreements can be traced to a “clash of narratives.” Drawing on the “Bayesian Networks” literature, we represent a narrative by a causal model that maps actions into consequences, weaving a selection of other random variables into the story. Narratives generate beliefs by interpreting long-run correlations between these variables. An equilibrium is defined as a probability distribution over narrative-policy pairs that maximize a representative agent's anticipatory utility, capturing the idea that people are drawn to hopeful narratives. Our equilibrium analysis sheds light on the structure of prevailing narratives, the variables they involve, the policies they sustain, and their contribution to political polarization. (JEL D72, D83, D85, F52)
Overreaction in Macroeconomic Expectations
Pedro Bordalo, Nicola Gennaioli, Yueran Ma, Andrei Shleifer · American Economic Review
Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects
Clément de Chaisemartin, Xavier D’Haultfœuille · American Economic Review
Bartik Instruments: What, When, Why, and How
Paul Goldsmith-Pinkham, Isaac Sorkin, Henry Swift · American Economic Review
Social Media, News Consumption, and Polarization: Evidence from a Field Experiment
Roee Levy · American Economic Review
Methods Matter: p-Hacking and Publication Bias in Causal Analysis in Economics
Abel Brodeur, Nikolai Cook, Anthony Heyes · American Economic Review
Cities in Bad Shape: Urban Geometry in India
Mariaflavia Harari · American Economic Review
Valid <i>t</i>-ratio Inference for IV
David S. Lee, Justin McCrary, Marcelo J. Moreira, Jack Porter · American Economic Review
Social Media and Mental Health
Luca Braghieri, Roee Levy, Alexey Makarin · American Economic Review