We provide a unified directed search framework with general production and matching specifications that encompasses most of the existing literature. We prove the existence of sub-game perfect Nash equilibria in pure firm strategies in a finite version of the model. We use this result to derive a more complete characterization of the equilibrium set for the finite economy and to extend convergence results as the economy becomes large to general production and matching specifications. The latter extends the micro-foundations for the standard market-utility assumption used in competitive search models with a continuum of agents to new environments.
On the Game-theoretic Foundations of Competitive Search Equilibrium
International Economic Review, 2012, Vol 53 (1), 1-21. With M. Galenianos.
We study a finite directed-search wage posting game among heterogeneous firms (allowing for risk aversion, moral hazard,…), including limit theorems.
American Economic Review, 2015, Vol 105 (10), 3030-3060. With Leo Kaas. We propose a tractable competitive search model with heterogeneous multi-worker firms, and investigate firm growth and business cycles. Go to paper
Inferring Risk Perceptions and Preferences using Choice from Insurance Menus: Theory and Evidence
Economic Journal, 2021 131: 713-744. With Ericson, Spinnewijn &, Starc Demand for insurance can be driven by high risk aversion or high risk, and we show how to separate the two using observed market shares. Go to paper
Econometrica, 2015, Vol 83 (5), 1849-1875. With K. Kim. [online appendix] We introduce cheap-talk into a market game and study if the equilibrium can replicate the constraint efficient allocation under (reserve) price posting. Go to paper
Journal of Political Economy, 2017, 124(1), 224-264. With G. Grossman & E. Helpman. (simulations, matlab). We introduce two-sided heterogeneity into a Hecksher-Ohlin-style trade model to study factor reallocation and wage inequality within and across sectors. Go to paper
Journal of Economic Theory, 2010/145, 1354-1385. With Jan Eeckhout. Search affects competing mechanisms: if meetings with low types reduce those of high types, price posting and market separation replace auctions. Go to paper
B.E. Journals of Theoretical Economics, 2013, Vol 13 (1). With S. Ludwig and A. Sandroni. We document a revealed preference for randomization for “social goods”, while such non-standard behavior is not present for private consumption goods. Go to paper
American Economic Review P&P, 2017, 107(5): 158–162 With J. Greenwood, C. Santos & M. Tertilt. In a quantitative equilibrium model of sexual behavior and HIV/AIDS transmission we study policies that encourage long-term partnerships. Go to paper
Review of Economic Studies, 2015, Vol 82 (2), 659-692. With Fane Groes and Iourii Manovskii. Occupational mobility is highest for high and low earners, and the former move “up” and the latter “down” as in models of vertical re-sorting. Go to paper