Workshop Schedule for Fall 2014:

The workshop organizers for the Fall 2014 quarter are Emir Kamenica and Eric Budish. Please contact Amanda Whittington to be added to the listserv to receive weekly updates.

The Workshop on Applied Theory meets on Mondays, 1:30-3:00 PM, in Harper Center, Room 3B.

September 29

Steven Callander, Stanford Graduate School of Business

Paper Title: "Optimal Search on Rugged Landscapes"


Abstract: An emergent theme in the study of organizations is the broad differences in managerial practices and performance across firms. We develop an explanation for these phenomena that turns on the complexity of the environments that firms operate in. We construct a model that formally captures the difficulty of the manager's problem and shows how the combination of theoretical knowledge and experience drive the choice of managerial practices. In this setting the evolution of firms is path dependent, marked by numerous failures, successes, and reversals. Nevertheless, patterns emerge. We show in particular how initial differences in performances persist and grow in expectation over time. We then apply the model to several long-standing questions in the study of organizations, exploring how imitation and coordination interact with the difficulty of the manager's problem. We also apply the model to the growth and development of nations, showing how the performance dynamics that emerge resonate with historical experience.



September 30

Held Jointly with the Workshop in Economic Theory (*please note the time is 3:30-5pm in Room SHFE 112 at 5757 S University Ave)

Navin Kartik, Columbia University

Paper Title: "Does Competition Promote Disclosure?"


Abstract: We develop a result on Bayesian updating. Roughly, when two agents have different priors, each believes that a (Blackwell) more informative experiment will, on average, bring the other's posterior closer to his own prior. We apply the result to two models of multi-sender strategic communication: voluntary disclosure and costly falsification/signaling. Sender's information revelation are strategic complements when there is a cost to falsification or to concealing information, but strategic substitutes when there is a cost to disclosing information. Competition between senders benefits a receiver in the former cases but not necessarily in the latter.

October 13

Asher Wolinsky, Northwestern University

Paper Title: "A Common Value Auction with Bidder Solicitation"


Abstract: We study a common-value, first-price auction in which the number of bidders is endogenous: the seller (auctioneer) knows the value and solicits bidders at a cost. The number of bidders, which is unobservable to them, may thus depend on the true value, giving rise to a solicitation effect -- being solicited already conveys information. The solicitation effect is a key difference from standard common value auctions. In contrast to standard auctions, the equilibrium bid distribution may exhibit atoms.We also discuss information aggregation in the case of small bidder solicitation cost. We show that there is a type of equilibrium that aggregates information well when the most favorable signals are informative. However, there may also be an equilibrium that fails to aggregate any information.

October 20

Michael Woodford, Columbia University

Paper Title: "An Optimizing Neuroeconomic Model of Discrete Choice"


Abstract: A model is proposed in which stochastic choice results from noise in cognitive processing rather than random variation in preferences. The mental process used to make a choice is nonetheless optimal, subject to a constraint on available information-processing capacity that is partially motivated by neurophysiological evidence. The optimal information-constrained model is found to offer a better fit to experimental data on choice frequencies and reaction times than either a purely mechanical process model of choice (the drift-diffusion model) or an optimizing model with fewer constraints on feasible choice processes (the rational inattention model).


November 3

Jan Eeckhout, Pompeu Fabra University

Paper Title: "Stochastic Sorting: Mismatched CEOs and their Performance"


Abstract: We analyze matching markets with stochastic types: agents’ payoff-relevant characteristics are realized after matching takes place, and matches are formed based on ex-ante attributes. We derive conditions for positive/negative assortative matching which relate properties of the match payoff function with the stochastic order imposed on the distributions of the agents’ characteristics. Within this framework we analyze the matching of CEOs to firms in a principal-agent setting. We find that CEOs are substantially mismatched: while there are strong complementarities in output, ex ante types are barely predicting ex post types. The loss due to mismatch is enormous, 1.5% of the total market value, which is multiple times the total value of compensation. At the same time, mismatch has a very small effect on effort. This indicates that screening and corporate governance to ensure that the right candidate is selected are more important than the provision of incentives.


November 11

Held Jointly with the Workshop in Economic Theory (*please note the time is 3:30-5pm in Room SHFE 112 at 5757 S University Ave)

Andrzej Skrzypacz, Stanford Graduate School of Business

Paper Title: "Dynamic Trading: Price Inertia, Front-Running and Relationship Banking"


Abstract: We build a linear-quadratic model to analyze trading in a market with private information and heterogeneous agents. Agents receive private endowment shocks and trade continuously. Agents differ in their need for trade as well as size, i.e. the ability to stay away from their ideal positions. In equilibrium, trade is gradual, its speed depends on the size of the market, and trade among large market participants is slower than that among small investors. Price has momentum due to the actions of large traders: it drifts up if the sellers are fewer and larger and the buyers are smaller and more competitive, and vice versa. The model captures welfare: it can answer questions about the social costs and bene ts of high-frequency traders, the welfare consequences of market consolidation, and many others.

November 17

Andrea Prat, Columbia University

Paper Title: "Media Power"


Abstract: How much influence can news providers exert on the political process? This paper defines the power of a media organization as its ability to induce voters to make electoral decisions they would not make if reporting were unbiased. While existing media concentration measures are builty by aggregating market shares across platforms, the new measure performs cross-platform shares. The paper derives a robust upper bound to media power over a range of assumptions on the beliefs and attention patterns of voters. Computing the value of the index for all major news sources in the United States from 2000 to 2012 results in four findings. First, it cannot be excluded that the three larges media conglomerates could individually swing the outcome of most presidential elections. Second, in all specifications the most powerful media organizations are broadcasters: the press and new media are always below. Third, relative media power is well approximated by a simple function of attention shares. Fourth, a calibrated version of the mode indicates that media power is much lower than the upper bound but still substantial.

November 24

Bruce Hajek, University of Illinois at Urbana Champaign

Paper Title: "Auction Design and Wireless Spectrum Auctions"


Abstract: This talk will focus on theory and practice of combinatorial auctions and their application to the sale of wireless spectrum licenses.   As new wireless applications emerge worldwide, the wireless industry and government regulators are looking to reallocate wireless spectrum to better match the demand. Combinatorial auctions can play an effective role in the allocation process, but important implementation and theoretical issues remain.  The talk will include an overview of recent research on the use of profit sharing contracts and core projecting auctions. (Joint work with Vineet Abhishek and Prof. Steven Williams)



December 2

Held Jointly with the Workshop in Economic Theory (*please note the time is 3:30-5pm in Room SHFE 112 at 5757 S University Ave)

Alex Wolitzky

Paper Title: "Capital Taxation under Political Constraints"


Abstract: This paper studies optimal dynamic tax policy under the threat of political reform. A policy will be reformed ex post if a large enough political coalition supports reform; thus, sustainable policies are those that will continue to attract enough political support in the future. We find that optimal marginal capital taxes are either progressive or U-shaped, so that savings are subsidized for the poor and/or the middle class but are taxed for the rich. U-shaped capital taxes always emerge when the salient reform threat consists of radically redistributing capital and individuals’ political behavior is purely determined by economic motives.



Archives of Past Workshops:

Looking for information about previous workshops? We maintain a partial archive of schedules and papers beginning in the fall of 2005. Please note that in most cases the archived papers have been significantly revised or published.
Go to archives.