Economics
In high-risk environments, traditional indemnity insurance is often unaffordable or ineffective, despite its well-known optimality under expected utility. We compare excess-of-loss indemnity insurance with parametric insurance within a…
We study the population limit maximum regret (MR) of plug-in prediction when the decision problem is to choose between two treatments for the members of a population with observed covariates x. In this setting, the optimal treatment for…
Recent literature on policy learning has primarily focused on regret bounds of the learned policy. We provide a new perspective by developing a unified semiparametric efficiency framework for policy learning, allowing for general treatments…
This article identifies the factors that drove house prices in 13 advanced countries over the past 35 years. It does so based on Breiman s (2001) random forest model. Shapley values indicate that annual house price growth across countries…
This paper shows how to identify and estimate the seller's risk parameter in an ascending auction. We consider a semiparametric model where the seller has a parametric utility function (such as CARA or CRRA) and the distribution of bidder…
This paper analyzes a society composed of individuals who have diverse sets of beliefs (or models) and diverse tastes (or utility functions). It characterizes the model selection process of a social planner who wishes to aggregate…
We axiomatically define a cardinal social inefficiency function, which, given a set of alternatives and individuals' vNM preferences over the alternatives, assigns a unique number -- the social inefficiency -- to each alternative. These…
In the context of a binary outcome, treatment, and instrument, Balke and Pearl (1993, 1997) es- tablish that the monotonicity condition of Imbens and Angrist (1994) has no identifying power beyond instrument exogeneity for average potential…
I study reputation formation in repeated games where player actions endogenously determine the probability the game permanently ends. Permanent exit can render reputation useless even to a patient long-lived player whose actions are…
The Global Minimum Tax (GMT) is applied only to firms above a certain size threshold, permitting countries to set differential tax rates for small and large firms. We analyse tax competition among multiple tax havens and a non-haven country…
We introduce a new smooth transition vector autoregressive model with a Gaussian conditional distribution and transition weights that, for a $p$th order model, depend on the full distribution of the preceding $p$ observations. Specifically,…
We study how religious competition-defined as the entry of a religious organization with innovative worship practices into a predominantly Catholic municipality-affects domestic violence. Using municipality-level data from Colombia and a…
This study investigates the impact of integrating gender equality into the Colombian constitution of 1991 on attitudes towards gender equality, experiences of gender-based discrimination, and labor market participation. Using a…
This paper adapts ideas from social identity theory to set out a new framework for modelling conspicuous consumption. Agents derive utility from their consumption of a status good and from belonging to an identity group with high status…
A new mixture vector autoregressive model based on Gaussian and Student's $t$ distributions is introduced. As its mixture components, our model incorporates conditionally homoskedastic linear Gaussian vector autoregressions and…
A structural Gaussian mixture vector autoregressive model is introduced. The shocks are identified by combining simultaneous diagonalization of the reduced form error covariance matrices with constraints on the time-varying impact matrix.…
Ethnic-based political inequality is widespread, yet its underlying drivers remain poorly understood. This paper shows that an ethnic group's relative size is a key correlate of its access to central executive power. Using data on 575…
We introduce a new mixture autoregressive model which combines Gaussian and Student's $t$ mixture components. The model has very attractive properties analogous to the Gaussian and Student's $t$ mixture autoregressive models, but it is more…
In this paper we investigate panel regression models with interactive fixed effects. We propose two new estimation methods that are based on minimizing convex objective functions. The first method minimizes the sum of squared residuals with…
Homophily based on observables is widespread in networks. Therefore, homophily based on unobservables (fixed effects) is also likely to be an important determinant of the interaction outcomes. Failing to properly account for latent…