Related papers: Sorting along Business Cycles
Researchers have long proposed using economic approaches to resource allocation in computer systems. However, few of these proposals became operational, let alone commercial. Questions persist about the economic approach regarding its…
We study markets where firms compete for consumer attention by subsidizing costly product inspection. These subsidies do not change product quality, but they alter the order in which consumers search by lowering inspection costs. We…
In complex systems, many different parts interact in non-obvious ways. Traditional research focuses on a few or a single aspect of the problem so as to analyze it with the tools available. To get a better insight of phenomena that emerge…
We study the collective behavior of interacting agents in a simple model of market economics originally introduced by N{\o}rrelykke and Bak. A general theoretical framework for interacting traders on an arbitrary network is presented, with…
We model an economy-wide production network by cascading binary compounding functions, based on the sequential processing nature of the production activities. As we observe a hierarchy among the intermediate processes spanning the empirical…
As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a model integrating structural change and regional disparities to jointly capture these phenomena. A key…
This paper analyzes the equilibrium distribution of wealth in an economy where firms' productivities are subject to idiosyncratic shocks, returns on factors are determined in competitive markets, dynasties have linear consumption functions…
We develop a new framework for modeling innovation networks which evolve over time. The nodes in the network represent firms, whereas the directed links represent unilateral interactions between the firms. Both nodes and links evolve…
The potential impact of automation on the labor market is a topic that has generated significant interest and concern amongst scholars, policymakers, and the broader public. A number of studies have estimated occupation-specific risk…
A firm can complete the tasks needed to produce output using either machines or workers. Unlike machines, workers have private information about their preferences over tasks. I study how this information asymmetry shapes the mechanism used…
Understanding the structure and formation of networks is a central topic in complexity science. Economic networks are formed by decisions of individual agents and thus not properly described by established random graph models. In this…
We introduce an agent-based model, in which agents set their prices to maximize profit. At steady state the market self-organizes into three groups: excess producers, consumers and balanced agents, with prices determined by their own…
We examine how career concerns influence the behavior and mobility of financial advisers. Drawing on a uniquely comprehensive matched panel that combines employer-employee data with a longstanding national ranking, our study tests…
Business cycles (a periodic change of e.g. GDP over five to ten years) exist, but a proper explanation for it is still lacking. Here we extend the well-known NAIRU (non-accelerating inflation rate of unemployment) model, resulting in a set…
Several tiers of social organization with varying economic and social disparities have been observed. However, a quantitative characterization of the types and the causal mechanisms for the transitions have hardly been explained. While…
This paper explores team formation when workers differ in skills and their desire to out-earn co-workers. I cast this question as a two-dimensional assignment problem with imperfectly transferable utility and show that equilibrium sorting…
Supply chain network is critical to serving customers, so the most common practices are to determine the number, location, and capacity of facilities. But at the same time, uncertainties and risks must be taken into account in order to…
In many prediction problems, the predictive model affects the distribution of the prediction target. This phenomenon is known as performativity and is often caused by the behavior of individuals with vested interests in the outcome of the…
We consider a simple variant of the von Neumann model of an expanding economy, in which multiple producers make goods according to their production function. The players trade their goods at the market and then use the bundles acquired for…
This paper analyzes a steady state matching model interrelating the education and labor sectors. In this model, a heterogeneous population of students match with teachers to enhance their cognitive skills. As adults, they then choose to…