Marcos Cardozo - Research

On the Emergence of International Currencies: An Experimental Approach. (with Yaroslav Rosokha and Cathy Zhang) (R&R at Journal of Economic Behavior and Organization)

Abstract: We integrate theory and experimental evidence to study the emergence of different international monetary arrangements based on the circulation of two intrinsically worthless fiat currencies as media of exchange. Our framework is based on a two-country, two-currency search model where the value of each currency is jointly determined by private agents' decisions and monetary policy formalized as changes in a country's money growth rate. Results from the experiments indicate subjects coordinate on a regime where both currencies are accepted even when other regimes are theoretical possibilities. At the same time, we find the emergence of international currency depends on relative inflation rates where sellers tend to reject payment with a more inflationary foreign currency.

Improving public goods provision using reward-based crowdfunding . (Under review)

Abstract: This study examines reward-based crowdfunding for threshold public good provision with refunds. I present a model and test the theoretical implications in an online experiment focusing on equilibrium coordination. A fundraiser offers individually rational and incentive-compatible— i.e. screening —contracts to potential contributors, specifying for each contract a contribution level and the value of an individual reward. The presence of multiple equilibria, notably the screening and no-contribution equilibria, highlights the necessity for empirical analysis of equilibrium selection. I find that subjects predominantly choose the screening contracts and that an exogenous reward budget increases expected funds raised and the funding probability of the public good, compared to a treatment without a reward budget. Finally, I use an evolutionary learning model to capture dynamic behavior and equilibrium selection. In the model simulations agents learn to choose their incentive-compatible contract more often as they play more rounds, consistent with the experimental findings.

Short-term contrarian excess returns in US stocks after one-day abnormal returns. Manuscript in preparation.

Abstract: I document evidence that stocks experience abnormally high returns in the following periods after a "dip"—an abnormally negative return—that cannot be fully explained by the Sharpe-Lintner CAPM. I test the performance of a simple trading strategy consisting of buying after the dip, and holding for a couple of trading weeks at maximum.

Global Games and Informational Institutions (slides) Data collection phase.

Abstract: This study builds on the global games classical setting by introducing a "holding tank" mechanism aimed at enhancing coordination in incomplete-information scenarios. Agents aim to change the status quo, such as political shifts or labor strikes, but may face the risk of retaliation. The holding tank serves as a centralized institution that verifies whether coordinated actions meet a predefined threshold. Actions are publicly disclosed if the threshold is met, otherwise they remain confidential, reducing the risk of retaliation. The study empirically tests whether this mechanism consistently improves coordination, finding that its efficacy varies based on model parameters.