Working Papers

Rolodex Game in Networks (with Pieter Gautier and Guido Menzio, August 2017) The paper studies the Rolodex bargaining game in networks. We first revisit the Rolodex game originally proposed in the context of intra firm bargaining, in which a central player bargains sequentially with multiple peripheral player. We show that the unique no-delay SPE of this game yields the Myerson-Shapley value for the star graph in which the central player is linked to all peripheral players. Second, we propose a Rolodex game for a general graph. Links in this graph negotiate sequentially, with one of the linked players making an offer to the other. If the respondent rejects, the link moves to the end of the line and the direction of the offer is reversed for the next negotiation of this link. As in the original Rolodex game, all agreements are renegotiated in the event of a breakdown. We show that the unique no-delay SPE of this game yields the Myerson-Shapley value for the corresponding graph.

Welfare Effects of Short-Time Compensation (with Helge Braun, this draft January 2017) We study welfare effects of public short-time compensation (STC) in a model in which firms respond to idiosyncratic profitability shocks by adjusting employment and hours per worker. Introducing STC substantially improves welfare by mitigating distortions caused by public unemployment insurance (UI), but only if firms have access to private insurance. Otherwise firms respond to low profitability by combining layoffs with long hours for remaining workers, rather than by taking up STC. Optimal STC is substantially less generous than UI even when firms have access to private insurance, and equally generous STC is worse than not offering STC at all.