C. Matthew Leister
Publications
(by topic, with selected summaries)
Social and Economic Networks: Theoretical Foundations
Social Connectedness and Local Contagion, The Review of Economic Studies, 89, 372-410, 2022
with Yves Zenou and Junjie Zhou
This paper solves a difficult open question in the Global Games literature: what are the (equilibrium) behaviors of agents when they adopt new products or technologies, e.g., generative AI tools, and interact in a general social network. And how does the network shape the spread of adoption?
Conclusion: Agents form "coordination sets" where incentives to adopt are identical across agents: this helps to explain fads where many consumers adopt, but the fad fails to extend to some consumer groups. To solve for the set of coordination sets from the network, we developed a novel Sequential Average Network Density algorithm that iteratively collects the coordination sets; a dual solution can be applied with O(n) complexity (see our SSRN paper appendix).
Information Acquisition and Welfare in Network Games, Games and Economic Behavior, 122, 453-475, 2020
This paper solves and describes equilibrium incentives for agents to acquire costly information of an unknown state, e.g., a bank/trader learning about a firm's future earnings per share, to use this information to make strategic decisions, e.g., taking long or short positions on the firm, while payoffs dependent on actions by others in a network, e.g., positions by other banks/traders. The paper also studies the welfare properties of equilibrium information acquisition.
Conclusion: Agents display an inefficient "bunching" in their level of expertise, where those positioned to be most expert on the unknown state acquire too little information while others in the network can invest too much in costly information. Public certification of experts' acquired expertise, e.g., Bloomberg yearly lists of top economic forecasters, can help to alleviate these inefficiencies.
Charitable Giving
Persuadable or Dissuadable Altruists? The Impact of Information of Recipient Characteristics on Giving, The Economic Journal (featured article), 133, 2925–2948, 2023
with Lata Gangadharan, Philip J Grossman, Lingbo Huang, and Erte Xiao
This paper addresses a basic question: should charities commit to providing donors with information about the recipients of their donations?
Conclusion: Yes! While negative information on some recipients may discourage donations, the overall impact on donations is positive. Donors want to know where their money will go; information reduces the risk they face. Donors tend to be "persuadable": the donors receiving positive information are shown to respond much more than those receiving negative information. Our results help encourage charities to embrace more transparency.
Paternalistic Giving: Restricting Recipient Choice, Journal of Economic Behavior & Organization, 151, 143-170, 2018
with Lata Gangadharan, Philip J Grossman and Kristy Jones
Finance and Trade in Networks
Liquidity Risk in Sequential Trading Networks , Games and Economic Behavior, 109, 565-581, 2018
with Shachar Kariv and Maciej Kotowski
This paper helps to explain price and profit dynamics in decentralized markets, e.g., over-the-counter bond trading.
Conclusion: Theory and experiments align to unveil a basic advantage that downstream resale traders enjoy: these traders face less resale risk in the market and benefit from higher expected trading profits.
Trading Networks and Equilibrium Intermediation, mimeo
with Maciej Kotowski
Information Diffusion in Networks
Word-of-Mouth Communication and Search, The RAND Journal of Economics, 51, 676-712, 2020
with Arthur Campbell and Yves Zenou
This paper helps to explain the dynamics of word-of-mouth communication regarding the quality of goods when multiple firms compete in a market, and how that communication shapes the profit incentivizes for product quality.
Conclusion: Greater amounts of word-of-mouth communication from all consumers can help to prevent low-quality products from entering the market.
Competing Diffusions in a Social Network, mimeo
with Arthur Campbell and Yves Zenou
Political Networks
Influencing a Polarized and Connected Legislature , Games and Economic Behavior, 142, 833-850, 2023
with Ratul Das Chaudhury and Birendra Rai
Risk Sharing
Natural disaster and risk-sharing behavior: Evidence from rural Bangladesh, Journal of Risk and Uncertainty, 61, 67–99, 2020
with Asadul Islam, Minhaj Mahmud & Paul A. Raschky
minor contributor: I was invited by Paul Raschky to join the paper in R&R specifically to develop the theoretical model (in Appendix 1) to help interpret the experiment setup and findings.