Ongoing Research

Working Papers

This paper introduces a dynamic model of public housing allocation in which units that arrive stochastically must be matched upon arrival with applicants on a waiting list. We establish a lower bound on the number of possible violations of ex-post Pareto efficiency or envy-freeness that grows linearly with the applicant pool. We construct a novel strategy-proof direct mechanism that yields interim Pareto efficient and envy-free outcomes by optimizing applicants’ preferences over buildings and expected waiting times through building-specific queues. Using data on preferences for public housing, we estimate that adopting the proposed mechanism would improve welfare by $2,300–$4,900 per applicant.

[Online Appendix]

We consider sequential search by an agent who cannot observe the quality of goods but can acquire information by buying signals from a profit-maximizing principal with limited commitment power. The principal can charge higher prices for more informative signals in any period, but high prices in the future discourage continued search by the agent, thereby reducing the principal's future profits. A unique stationary equilibrium outcome exists, and we show that the principal (i) induces the socially efficient stopping rule, (ii) extracts the full surplus, and (iii) persuades the agent against settling for marginal goods, extending the duration of surplus extraction. However, introducing an additional, free source of information can lead to inefficiency in equilibrium. 

[Online Appendix]

Bravo Center for Economic Research Working Paper #2023-001

Can evidence or mediation change a sender's behavior and improve the receiver's expected utility in persuasive communication frameworks? In a mediated Bayesian persuasion model with unverifiable evidence, evidence cannot improve the receiver's expected utility when the sender communicates it. When the intermediary communicates the evidence, the receiver's expected utility improves only with a positive autarky value of the intermediary's private information (AVIPI), a novel information accuracy measure we propose. Finally, the sender's strategic behavior is generally affected by the intermediary's presence as he tries to persuade the intermediary to, in turn, persuade the receiver.

This paper supersedes "Two-Sided Matching Platforms: Characteristics, Welfare, and Design."

I study the relationship between a matching platform's design and users' welfare. Increasing users' number of prospects has a positive choice effect (users are more likely to find a desirable partner) and a negative competition effect (users are less likely to match). The interaction of choice and competition effects has three significant consequences. First, welfare is not strictly increasing but is single-peaked in users' number of prospects, leading to ambiguous platform network effects. Second, market sides even out in size through agents' optimal enrollment decisions. Finally, a designer generally fails to maximize users' welfare and platform enrollment simultaneously. 

[slides]

Works in Progress

Perennial Working Papers

I study a real-options model with a biased investor that faces uncertainty regarding the value of a project (VOP). I show that such a problem presents significant technical difficulties in using dynamic programming. By allowing the investor to compute the VOP from data, I  transform the problem into one where dynamic programming is feasible. As she is biased, the investor's estimation process is subject to computation mistakes. I show that the biases lead to a wait-and-see approach: at the VOP at which a rational investor optimally exercises the option, the biased one is still unconvinced and waits for a more extreme valuation. Finally, I show that the wait-and-see approach explains the documented relationship between financial literacy and investors' inertia (investors with a poor understanding of financial concepts exhibit long inactivity spells).