You're probably familiar, at least in passing, with the 'convexity' of long-term bonds - i.e. that yields dropping 1% produce a bigger price move than yields rising 1%. A significant amount of brainpower has gone into understanding all the ramifications of this convexity in the fixed income...

We develop approximate estimation methods for exponential random graph models (ERGMs), whose likelihood is proportional to an intractable normalizing constant. The usual approach approximates this constant with Monte Carlo simulations, however convergence may be exponentially slow. We propose a...

This paper studies the dependence structure of sparse networks realized according to a strategic model of network formation with homophilous agents. We argue that equilibrium selection and chains of indirect dependence generated by strategic interactions are the main drivers of network...

Performance feedback is ubiquitous in competitive settings where new products are developed. This article introduces a fundamental tension between incentives and improvement in the provision of feedback. Using a sample of four thousand commercial logo design tournaments, I show that feedback...

We develop a non-parametric test for consistency of player behavior with the Quantal Response Equilibrium (QRE). The test exploits a characterization of the equilibrium choice probabilities in any structural QRE as the gradient of a convex function; thereby QRE-consistent choices satisfy the...

The interaction of economic agents is one of the most important elements in economic analyses. While peer effects on subjective outcomes, behavior or decisions, are inherently difficult to identify and estimate because these variables are prone to misclassification errors. In this paper, we...

The rational choice model presumes that individuals are rational and make optimizing decisions based on available information. Theory suggests that lack of information and risk (and risk perceptions) can alter decisions from the static perfect information case, but do not necessarily result in...

This paper develops a method for identifying and estimating student preferences in centralized matching mechanisms when students are ranked by exam scores. In these mechanisms, exam scores contain important information for inferring students' heterogeneous preferences because students have...

Weak contract enforcement may reduce the efficiency of investment in developing countries. I study how contract enforcement affects efficiency in procurement auctions for the largest power projects in India. I gather data on bidding and ex post contract renegotiation and find that the...