Research

My main research fields are microeconomic theory (economics of information and uncertainty in particular) and financial economics. I am using both theoretical and empirical methods.

The financial system provides households and firms with the means to transfer and share risk and to allocate resources over time, through which poverty may be reduced and investments stimulated, leading to economic development. It is however not obvious if a socially desirable resource allocation is being achieved through a well-functioning financial system. For instance, although disaster insurance is supposed to give households and firms financial protection against severe losses with low probabilities, there is ample evidence that subscription to such insurance is limited. Also, the financial system tends to be unstable as shown in many financial crises in the past, affecting the real economy adversely. 

To understand the mechanism causing these problems, I am focusing on the roles of expectations or beliefs.  For instance, the limited subscription to disaster insurance may be because of disagreement in the probability assessment of loss events between the insurance provider and the potential subscribers. Also, the instability of the financial system may well have been propagated by diverse expectations (may involve ‘speculations’). 

In addition, the very existence of diverse expectations inevitably causes a conflict between ex ante and ex post evaluations, making welfare measurement a serious challenge. This is a serious issue, because decisions are made in accord with ex ante evaluations, while the consequences of the decisions will be subject to ex post evaluations, and there is no straightforward way to agree on a particular evaluation when different parties have different views.

With the above in mind, I am mainly studying the following two themes currently:

a)      The roles of finance and insurance under diverse expectations, including the mechanism that propagates financial instability and policies that restrict instability.

b)      Welfare measures under diverse expectations.

Selected Publications (For a full list, please refer to my CV) 

1. "Are macroeconomic indices fool's gold?" (with Maurizio Motolese), Journal of Economic Behavior and Organization, 217, 240-260, (2024).

2.  “Micro-prudential regulation and loan monitoring,” (with Norvald Instefjord), Journal of Financial Services Research, 63, 339-362, (2023).

3. “Adverse selection and moral hazard in corporate insurance markets: Evidence from the 2011 Thailand floods,” (with Daisuke Adachi, Yasuyuki Sawada and Kunio Sekiguchi), Journal of Economic Behavior and Organization, 205, 376-386, (2023).

4. “Countering public opposition to immigration: The impact of information campaigns,” (with Giovanni Facchini and Yotam Margalit), European Economic Review, 141, 103959, (2022). 

5. “Short and long recall errors in retrospective household surveys: Evidence from a developing country,” (with Yasuyuki Sawada and Mari Tanaka), Journal of Development Studies, 55, 2232-2253, (2019).

6. “Self-production and risk sharing against disasters: Evidence from a developing country,” (with Yasuyuki Sawada and Tomoaki Kotera), World Development, 94, 27 – 37, (2017). 

7. “Welfare effects of short-sale constraints under heterogeneous beliefs,” Economic Theory, 53, 283 – 314, (2013).

8. “Equivalent comparisons of information channels,” Theory and Decision, 71, 559 – 574, (2011). 

9. “A model of financial markets with endogenously correlated rational beliefs,” Economic Theory, 30, 431 – 452, (2007).

10. “Modelling exchange of probabilistic opinions,” Economic Theory, 21, 697 – 727, (2003).