(with M. Belhaj and M. Faure) Sharing Opportunities under Externalities
Abstract: A subset of economic agents in a society is aware of the existence of an economic opportunity, and compete for exploiting the opportunity. We study incentives to communicate about the existence of this economic opportunity when the exploitation of the opportunity by the winner generates externalities to other agents. We characterize the equilibria of the communication game, identify conditions under which more externalities generates more communication, and analyze welfare implications.
(with M. Belhaj and R. Bourlès) Risk-taking in financial networks (under revision)
Abstract: We analyze the risk-taking behaviors of financial institutions linked through shareholdings under prudential regulation, aiming at maximizing investments in risky assets under acceptable default probabilities in a context of an extreme adverse event hurting assets. We stress the strategic complementarities nature of risk-taking decisions, pin down risk-taking investments through the cross-shareholding network, and show how to implement regulation through capital requirements, and how to target banks with highest impact on aggregate investments in risky assets. Bringing the model to real-world data highlights the key role of network effects.
(with P. Escudié) Addiction in networks
In progress:
(with M. Belhaj and A. Seror) A model of social identity
(with M. Belhaj and J. Zheng) Narrow bracketing and risk-sharing networks