-with Doruk Iris (R&R at Journal of Economic Behavior and Organization)
This paper delves into the consequences of reciprocal preferences and countries' expectations towards each other in the context of international agreements aimed at providing global public goods. Reciprocal countries reward kindness (positive reciprocity) while retaliating against unkind behavior (negative reciprocity). We introduce a model where countries decide not only to participate but also determine the extent of their effort.
We demonstrate that reciprocal preferences can exert both positive and negative influences on the effort put forth by the signatories and non-signatories of a treaty, contingent upon their expectations towards others. When reciprocity concerns are limited, participation in a stable treaty either remains unchanged or contracts. However, sufficiently robust reciprocal preferences can lead to the formation of a stable grand coalition. Furthermore, we extend our model to a heterogeneous case where reciprocal and self-interested motivations coexist. Additionally, we explore a scenario in which a single country strategically and unilaterally employs its expectations towards others.
Costly Information Revealed by Beliefs: A More Direct Test of Rational Inattention Models
- with Hyeonggyun Ko and Jason Tayawa (Collecting Data)
Methods to measure attention
-Worked as a Research Assistant for Young-chul Kim and Glenn Loury
Previous studies find that some social groups are stuck in poverty traps because of network effects. However, these studies do not carefully analyze how these groups overcome low human capital investment activities. Unlike previous studies, the model in this paper includes network externalities in both the human capital investment stage and the subsequent career stages. This implies that not only the current network quality, but also the expectations about future network quality affect the current investment decision. Consequently, the coordinated expectation among the group members can play a crucial role in the determination of the final state. We define “overlap” for some initial skill ranges, whereby the economic performance of a group can be improved simply by increasing expectations of a brighter future. We also define “poverty trap” for some ranges, wherein a disadvantaged group is constrained by its history, and we explore the egalitarian policies to mobilize the group out of the trap.