Previous studies have revealed the role of relative performance information feedback on providing agent incentives under a relative rewarding scheme through laboratory experiments. This study examines the impact of relative performance information feedback of students' performance on their examination score under the relative grading scheme in an actual educational environment. Conducting a randomized controlled trial in a compulsory subject at a Japanese university, we show that the relative performance information feedback has a significantly positive impact on the students' examination score on average, but that the average positive impact is derived by the improvement of low-performing students.

Using an asset pricing model of a multisector production economy including pandemic disaster, we explain the average stock price boom and significant cross‐sectional variation of stock returns in the United States and Japan during the COVID‐19 pandemic recession. We find that two features of the pandemic, namely ambiguity and sector‐specific shocks, are critical determinants of the unusual asset price dynamics observed. Extending the model, we analyze the welfare effects of lockdown policy during pandemics for heterogeneous households. We theoretically show that enforcing a lockdown improves the welfare of asset holders and households working in sectors with positive sector‐specific shocks. Consequently, a Pareto‐optimal lockdown policy controls for the tightness of lockdown to maximize the welfare of households working in sectors with negative sector‐specific shocks.

This note demonstrates analytically that a persistent catastrophic shock on endowment growth, even if moderate, yields negative equity premiums when a representative agent is relatively prudent. In particular, it derives the minimum persistence necessary to have zero equity premiums.

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