Related papers: Wariness and Poverty Traps
Rationality is frequently associated with making the best possible decisions. It's widely acknowledged that humans, as rational beings, have limitations in their decision-making capabilities. Nevertheless, recent advancements in fields,…
As financial institutions increasingly rely on machine learning models to automate lending decisions, concerns about algorithmic fairness have risen. This paper explores the tradeoff between enforcing fairness constraints (such as…
Dynamic tolls present an opportunity for municipalities to eliminate congestion and fund infrastructure. Imposing tolls that regulate travel along a public highway through monetary fees raise worries of inequity. In this article, we…
We study the effect of altruism in two simple asset exchange models: the yard sale model (winner gets a random fraction of the poorer player's wealth) and the theft and fraud model (winner gets a random fraction of the loser's wealth). We…
We analyze the household savings problem in a general setting where returns on assets, non-financial income and impatience are all state dependent and fluctuate over time. All three processes can be serially correlated and mutually…
The 2008 global financial crisis marked the beginning of a decade dominated by fiscal austerity policies in much of the developed world. This paper presents a qualitative narrative review of an extensive collection of academic literature to…
This paper investigates the interactions among consumption/savings, investment, and retirement choices with income disaster. We consider low-income people who are exposed to income disaster so that they retire involuntarily when income…
A simple generative model of a foraging society generates significant wealth inequalities from identical agents on an equal opportunity landscape. These inequalities arise in both equilibrium and non-equilibrium regimes with some societies…
The sustainability of cooperation is crucial for understanding the progress of societies. We study a repeated game in which individuals decide the share of their income to transfer to other group members. A central feature of our model is…
We study a credit risk model which captures effects of economic interactions on a firm's default probability. Economic interactions are represented as a functionally defined graph, and the existence of both cooperative, and competitive,…
This commentary explores how the platform economy shapes labour market responses during times of crisis, with a focus on gendered experiences. Drawing on cases of economic crisis, natural disasters, and refugee displacement, it examines how…
In this study, we couple a population dynamics model with a model for optimal foraging to study the interdependence between individual-level cost-benefits and population-scale dynamics. Specifically, we study the logistic growth model,…
A principal continually decides whether to approve resource allocations to an agent, who exerts private effort to remain eligible. The principal must perform costly inspections to determine the agent's eligibility. We characterize Markov…
This paper provides a detailed analysis of the local determinacy of monetary and non-monetary steady states in Tirole (1985)'s classical two-period overlapping generations model with capital and production. We show that the sufficient…
Substantial empirical research has shown that the level of individualism vs. collectivism is one of the most critical and important determinants of societal traits, such as economic growth, economic institutions and health conditions. But…
Algorithmic decision-making in high-stakes settings can have profound impacts on individuals and populations. While much prior work studies fairness in static settings, recent results show that enforcing static fairness constraints may…
Cascading failures, such as bankruptcies and defaults, pose a serious threat for the resilience of the global financial system. Indeed, because of the complex investment and cross-holding relations within the system, failures can occur as a…
We study the efficiency of allocations in large markets with a network structure where every seller owns an edge in a graph and every buyer desires a path connecting some nodes. While it is known that stable allocations in such settings can…
Many recent models of trade dynamics use the simple idea of wealth exchanges among economic agents in order to obtain a stable or equilibrium distribution of wealth among the agents. In particular, a plain analogy compares the wealth in a…
Empirical distributions of wealth and income can be reproduced using simplified agent-based models of economic interactions, analogous to microscopic collisions of gas particles. Building upon these models of freely interacting agents, we…