Working Papers
Replication of “Procrastination, Deadlines and Performance: Self-Control by Precommitment”
with Kyle Hyndman, 2024.
We present the results of a replication of Study 2 from Ariely and Wertenbroch (2002), as well as a comparison of the replication data and the original data, which was kindly given to us in 2006 by one of the original authors. We show that the results of the paper do not
replicate. In particular, in the replication, changes in the deadlines have a negligible effect on the three performance metrics and several survey metrics that were used in the original study. In particular, evenly spaced deadlines exogenously imposed on subjects do not stand apart for their effectiveness in reducing procrastination in subjects.
Modeling Adaptive Forward-Looking Behavior in Epidemics on Networks,
with Lorenzo Amir Nemati Fard, Michele Starnini, and Michele Tizzoni, NEW DRAFT, 2024.
Incorporating decision-making dynamics during an outbreak poses a challengefor epidemiology, faced by several modeling approaches siloed by different disciplines. We propose an epi-economic model where the choices of individuals respond to the infection dynamics over heterogeneous networks. Assuming myopic expectations, while maintaining a rational forward-looking component to individual optimal choices, we are able to describe the resulting equilibrium behavior of the epidemic by analytical expressions depending on the epidemic conditions. Through numerical simulations, we contrast different information structures: global awareness – individuals only know the disease prevalence in the population – with local awareness, where individuals know the prevalence in their neighborhood. We show that behavior change can flatten the epidemic curve, but local awareness more effectively curbs the disease compared to global awareness. Our work bridges classical epidemiology with the epi-economic approach, illustrating the impact of heterogeneous behavioral responses on epidemic spread.
Capital Structure and Hedging Demand with Incomplete Markets,
with Gian Luca Clementi and Piero Gottardi, last draft, 2022.
In this paper we study the role played by hedging demand in shaping firms’ capital structure. We develop and study a general equilibrium model with production and incomplete markets where households differ in their risk sharing needs. Value maximizing firms cater to these different needs when choosing their leverage, their size, and possibly the risk pro le of their production technology. We find that as the demand for hedging increases, firms issue more debt and destine only part of the greater proceeds to investment the remainder going to shareholders. How much more debt, depends on the availability of competing risk-sharing instruments, such as (government issued) risk free debt and derivatives. When the capital structure is jointly shaped by hedging demand and agency in the form of an asset substitution problem the greater risk induced by asymmetric information has countervailing effects on debt: On the one hand, debt is reduced to nudge shareholders into choosing lower risk. This is the standard asset substitution effect. On the other hand, however, the greater risk in production affects the state prices and calls for more debt.
Marriage, Fertility, and Cultural Integration in Italy,
with Giulia Tura, last draft, 2022 (first draft 2018).
We study the cultural integration of immigrants in Italy, estimating a structural model of marital matching and fertility along ethnic dimensions. We exploit rich administrative demographic data on the universe of marriages, births and separations from 1995 to 2012. We estimate strong preferences of ethnic minorities’ towards socialization of children to their own identity as well as high cultural intolerance of Italians towards immigrant minorities. In long-run simulations, we find that cultural intolerances, as well as fertility and homogamy rates, slow-down the cultural integration of some immigrant ethnic minorities, especially Latin America, East Asia and Sub-Saharan Africa. Nonetheless, 75% of immigrants integrate into the majoritarian culture over the period of a generation. We show by counterfactual analysis that a lower cultural intolerance of Italians towards minorities would lead to slower cultural integration by allowing immigrants a more widespread use of their own language rather than Italian in heterogamous marriages. Finally, we quantitatively assess the effects of large future immigration inflows.
Read Paper — Online Appendix — VoxEU — Marginal Revolution — ESWC 2020 (from 1:03:41 to 1:37:02)
Dynamic Linear Economies with Social Interactions,
with Yann Bramoullé and Onur Ozgur, last draft 2018.
Social interactions are arguably at the root of several important socio-economic phenomena, from smoking and other risky behavioral patterns in teens to peer effects in school performance. We study social interactions in linear dynamic economies. For these economies, we are able to (i) obtain several desirable theoretical properties, such as existence, uniqueness, ergodicity; to (ii) develop simple recursive methods to rapidly compute equilibria; and to (iii) characterize several general properties of dynamic equilibria. Furthermore, we show that dynamic forward looking behavior at equilibrium plays an instrumental role in allowing us to (iv) prove a positive identification result both in stationary and non-stationary economies. Finally, we study and sign the bias associated to disregarding dynamic equilibrium, e.g., postulating a sequence of static (myopic) one-period economies, a common practice in empirical work.
Dynamic Social Interactions and Smoking Behavior,
with Tiziano Arduini, Onur Ozgur, and Eleonora Patacchini, NEW DRAFT, 2024.
We study the risky behavior of adolescents. Concentrating on smoking, we structurally estimate a dynamic social interaction model in the context of students’ school networks included in the National Longitudinal Study of Adolescent Health (Add Health). The model allows for forward-looking behavior of agents, addiction effects, and social interactions in the form of preferences for conformity in the social network. We find strong evidence for forward-looking dynamics and addiction effects. We also find that social interactions in the estimated dynamic model are quantitatively large. A misspecified static model would fit data substantially worse while producing a much smaller estimate of the social interaction effect. The estimated dynamic model allows us to decompose the effect on smoking of a permanent shock to students’ preferences in the 10th grade – e.g., a shock to tobacco availability at home or family income – in its own direct component and in the component due to social interactions. Indeed we find large relative social effects in grade 10th, declining in grade 11th and 12th.
Multiple Equilibria,
with Andrea Moro and Giorgio Topa, 2011.
We study a general class of models with social interactions that might display multiple equilibria. We propose an estimation procedure for these models and evaluate its efficiency and computational feasibility relative to different approaches taken to the
curse of dimensionality implied by the multiplicity. Using data on smoking among teenagers, we implement the proposed estimation procedure to understand how group
interactions affect health-related choices. We find that interaction effects are strong both at the school level and at the smaller friends-network level. Multiplicity of equilibria is pervasive at the estimated parameter values, and equilibrium selection accounts for about 15 percent of the observed smoking behavior. Counterfactuals show that student interactions, surprisingly, reduce smoking by approximately 70 percent with respect to the equilibrium smoking that would occur without interactions.
Evolutionary Selection of Modular Decision Architectures,
with Emil Iantchev, 2010.
We study the evolutionary properties of decision processes. We show that a population of agents possessing decision architectures with hierarchically organized modules will have a strictly higher asymptotic growth factor than a population of agents with unitary decision architectures in which the modules are fully connected. Furthermore, we show that internal conflict within agents and behavioral heterogeneity across agents are properties of evolutionary equilibrium. We interpret these results as supporting economic models of multiple decision processes like e.g., planner-doer models.
The Distribution of Wealth and Redistributive Policies in Economies with Infinitely Lived Agents,
with Jess Benhabib, 2007.
We study the dynamics of the distribution of wealth in an economy with intergenerational transmission of wealth and redistributive fiscal policy. We characterize the transitional dynamics of the distribution of wealth as well as its stationary state. We show that the stationary wealth distribution is a Pareto distribution. We study analytically the dependence of the distribution of wealth, of wealth inequality, and of utilitarian social welfare on various redistributive fiscal policy instruments like capital income taxes, estate taxes, and welfare subsidies.