理论论文

We study the uneven effects of a commodity cycle, documenting its impact across workers based on their skill level and the region where they live. To this end, we develop a dynamic quantitative model of a multi-region economy featuring spatial linkages (interregional trade and migration) and downward wage rigidity. Empirically, we focus on Brazil’s experience during the commodity boom of the 2000s and subsequent bust of the 2010s. The skill premium falls during the boom, while the extent of downward wage rigidity determines whether it reverts or maintains its decline during the bust. In addition, there is substantial heterogeneity across Brazilian states in the gains from the commodity cycle. Finally, we build counterfactuals to show that both spatial linkages (interregional migration and interregional trade) and downward wage rigidity jointly shape the impact of the commodity cycle on the skill premium, real wages, unemployment, and spatial disparities.

We consider five models of international trade that belong to the class of models in which the trade elasticity and domestic trade share are sufficient statistics for the welfare cost of autarky. Three are fixed-variety models featuring increasing micro-level margins of adjustment: versions of the Armington model, the Ricardian model, and its variable-markup counterpart. Two are endogenous-variety models featuring monopolistic competition: versions of the Krugman model and the Melitz model. For the three fixed-variety models, we show theoretically that, although they imply the same mapping from the trade elasticity to welfare, they imply different mappings from the trade elasticity to observed order statistics of price gaps of identical goods across countries. This result implies that choosing the parameter that governs the elasticity of trade to match the same order statistics in the data differentially impacts each model’s measured welfare cost of autarky. We quantify these differences for all five models.

We study the welfare effects of price discrimination in a duopoly with both captive and contested consumers. Using a unified information design approach, we characterize the best and worst market segmentations for producer surplus, consumer surplus, and social surplus. The firm-optimal segmentation, which divides the market into two nested segments, consistently reduces consumer welfare relative to uniform pricing. The consumer-optimal segmentation, which divides the market into a symmetric segment and a nested segment, may sometimes yield a Pareto improvement but does not necessarily coincide with the social-optimal segmentation. (JEL D43, D83)

We analyze oligopolistic competition in which firms use contracts contingent on what buyers purchase from their rivals. We present a new mechanism through which a dominant firm, by using these contracts, can gain more from exploiting its rivals than from foreclosing them. This exploitation is achieved by requiring buyers to source at least a certain share of their total requirements from the dominant firm, though less than 100 percent. By optimally designing these contracts, the dominant firm can earn as much as it would if it were to acquire the rivals' specific technological and marketing capabilities at no cost. (JEL D43, D82, D86, K21, L14, M31)

We theoretically and experimentally study centralized college admissions in which colleges evaluate students under a ‘translucent’ admission system and students can learn each college’s suitability through costly information acquisition. In centralized matching via Gale and Shapley’s deferred acceptance algorithm, students decide whether to acquire information before submitting their rank-order lists. However, uncertainty about the final assignment lowers the expected gain from learning, thereby reducing social welfare, compared to a scenario without such uncertainty. Our experiments demonstrate that the welfare loss is greater with more opaque admission systems. The empirical social welfare obtained in our experimental treatments is consistently lower than the theoretical welfare, and we identify non-equilibrium learning as a main contributor.

We provide a strategic model of the formation of production networks that subsumes the standard general equilibrium approach. The objective of firms in our setting is to choose their supply relationships so as to maximize their profit at the general equilibrium that unfolds. We show that this objective is equivalent to the maximization by the firms of their eigenvector centrality in the production network. As is common in network formation games based on centrality, there are multiple Nash equilibria in our setting. We have investigated the characteristics and the social efficiency of these equilibria in a stylized version of our model representing international trade networks. We show that the impact of network structure on social welfare is firstly determined by a trade-off between costs of increasing process complexity and positive spillovers on productivity induced by the diversification of the input mix. We further analyze a variant of our model that accounts for the risks of disruption of supply relationships. In this setting, we characterize how social welfare depends on the structure of the production network, the spatial distribution of risks, and the process of shock aggregation in supply chains. We finally show that simple trade policies characterized by sets of links that are either prevented or catalyzed can be a powerful equilibrium selection device.

ABSTRACT I propose a dynamic equilibrium model of rental markets that endogenously gives rise to defaults on rents and evictions. In the model, eviction protections make it harder to evict delinquent renters, but higher default costs to landlords increase equilibrium rents. I quantify the model using micro data on evictions, rents, and homelessness. I find that stronger eviction protections exacerbate housing insecurity and lower welfare. The key empirical driver of this result is the persistent nature of risk underlying rent delinquencies. Rental assistance reduces housing insecurity and improves welfare because it lowers the likelihood that renters default ex ante.

We examine a unique auction format used in the Istanbul flower market, which could transform into either Dutch or English auction depending on bidders’ bidding behaviors. By introducing a time cost that reduces the value of a perishable good as time passes, we explore how this hybrid auction format accommodates the desire for speed via an adaptive starting price. We show that the Istanbul Flower Auction outperforms both the Dutch and English auctions in terms of the auctioneer’s utility. With numerical analysis, we also illustrate the Istanbul Flower Auction’s superiority in terms of social welfare and auction duration. Our results highlight the critical role of auction design in improving welfare when the duration of the auction process matters.

Labor market polarization is among the most important features in recent decades of advanced country labor markets. Yet key spatial aspects of this phenomenon remain under-explored. We develop four key facts that document the universality of polarization across cities, a city-size difference in the shock magnitudes, a skew in the types of middle-paid jobs lost, and the role of polarization in the great urban divergence of skills. Existing theories cannot account for these facts. Hence we develop a parsimonious theoretical account that does so by integrating elements from the literatures on labor market polarization and systems of cities with heterogeneous labor in spatial equilibrium.

We prove a Folk theorem when players with bounded rationality learn as they play a repeated potential game. We use a dynamic generalization of smooth fictitious play with bounded $m$-memory strategies to model learning with bounded rationality that is consistent with learning by algorithms. In a repeated potential game with perfect monitoring, we use this learning model to show that for any feasible and individually rational payoff profile, if players have sufficient memory, are sufficiently patient, and best respond with sufficiently few mistakes, then the players have a non-zero probability of learning an $m$-memory strategy profile that achieves an average payoff close to the specified payoff profile for an appropriate continuation game. Moreover, the strategy profile learned is an $m$-memory $\epsilon$-subgame perfect equilibrium of the repeated game. This finding demonstrates that competition authorities are correct in their concern about algorithmic collusion.

This paper analyzes the welfare properties of the mechanism Taiwan uses to match students to high schools. I study the Taiwan mechanism under a theoretical model where students share the same ordinal rankings, and a single lottery determines schools’ preferences. In this setting, all Taiwan mechanisms ex ante weakly Pareto dominate deferred acceptance for strategizing students. Additionally, in my model, there always exists a Taiwan mechanism that provides greater welfare than deferred acceptance to students who do not strategize. Using Cambridge Public School data, I demonstrate that the Taiwan mechanism outperforms deferred acceptance for a range of deduction rules.

This paper examines how offshoring shapes emissions leakage and global emissions in response to unilateral environmental policy. We use a general equilibrium offshoring model with heterogeneous firms, based on standard modeling assumptions, where firms allocate labor between production tasks and emissions abatement. We find that global emissions respond non-monotonically to a unilateral emissions tax increase: for small cross-country tax differentials, emissions fall; but as the difference widens, leakage exceeds 100%, raising global emissions due to a global technique effect. The cleanest domestic firms start offshoring and incumbent offshoring firms become dirtier under declining effective foreign taxes. We isolate the offshoring margin – one underexplored channel of leakage – and contrast our findings with comparable models of trade in final goods: the mode of globalization matters. Complementing the unilateral reform with a border carbon adjustment (BCA) prevents emissions leakage but may raise inequality between countries.

ABSTRACT We introduce the concept of subtle discrimination —biased acts that cannot be objectively ascertained as discriminatory. When candidates compete for promotions by investing in skills, firms' subtle biases induce discriminated candidates to overinvest when promotions are low‐stakes (to distinguish themselves from favored candidates) but underinvest in high‐stakes settings (anticipating low promotion probabilities). This asymmetry implies that subtle discrimination raises profits in low‐productivity firms but lowers them in high‐productivity firms. Although subtle biases are small, they generate large gaps in skills and promotion outcomes. We derive further predictions in contexts such as equity analysis, lending, fund flows, banking careers, and entrepreneurial finance.

Abstract We model a fishery with potential congestion, in which firms obtain public and private signals about the location of the densest fish stock. We analytically determine the regions of parameter space where greater precision of public and/or private information increases welfare, and we examine the effects of two types of information sharing. Using high-resolution data from the world’s largest fishery, we estimate the structural model. Point estimates imply that more precise private information raises welfare, whereas more precise public information has a negligible effect on welfare. Moreover, welfare is much more sensitive to changes in the precision of private information than to changes in the precision of public information. This difference reflects the fact that public information increases congestion more than private information does. We also find empirically that a small amount of information sharing can reduce welfare, whereas more extensive information sharing raises welfare, as do information clubs.

Customs data reveal the heterogeneity and granularity of relationships among buyers and sellers, showing how more exports to a destination break down into more firms selling there and more buyers per exporter. We develop a quantitative general equilibrium model of firm‐to‐firm matching that builds on this insight to separate the roles of iceberg costs and matching frictions in gravity. In the cross section, we find matching frictions as important as iceberg costs in impeding trade, and more sensitive to distance. Because domestic and imported intermediates compete directly with labor in performing production tasks, our model also fits the heterogeneity of labor shares across French producers. Applying the framework to the 2004 expansion of the European Union, reduced iceberg costs and reduced matching frictions contributed equally to the increase in French exports to the new members. While workers benefited overall, those competing most directly with imports gained less, even losing in some countries entering the EU.

Using agile supply chains, fast fashion companies have been viewed as best practice examples in industries. Prior research focuses on how agility can equip such companies with strong sense-and-respond capabilities to identify and fulfill unpredictable customer demands. There is another powerful dimension of agility—the ability to create new products frequently—that has enabled recent market success of companies such as Shein and Temu, labeled by some industry press as ultra-fast fashion. These companies, relying on end-to-end digital technologies, have pushed this dimension of agility to unprecedentedly high levels, launching new products with great frequency and variety. The frequent product launches create freshness, stimulating latent demands of consumers and making these companies “ultra-fresh” fashion, a term we adopt in this paper. We seek to model this dimension of agility as an operational strategy for demand creation. Our model enables us to explore the effects through the lens of profit to the firm, consumer surplus, and environmental impact. Our analysis reveals that frequent product launches, high variety, and low prices—the three salient features of ultra-fresh fashion—are driven by both the product design agility and the customers’ interest for product freshness. The ultra-fresh strategy allows steady profit increase for the firm and benefits consumers in aggregate but may cause negative environmental impact if left unchecked. This paper was accepted by Jay Swaminathan, operations management. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.06249 .