(with Arthur Robson), Econometrica 80, 1505–1531 (2012). Online Appendix.
Summary. This paper studies endogenous risk-taking by embedding a concern for status (relative consumption) into an otherwise conventional model of economic growth. We prove that if the intertemporal production function is strictly concave, an equilibrium must converge to a unique steady state in which there is recurrent endogenous risk taking.
(with Rajiv Vohra), Games and Economic Behavior 26, 286–336, 1999.
Summary. Consider an environment with widespread externalities, and suppose that binding agreements can be written. We study coalition formation in such a setting. Our analysis proceeds by defining on a partition function an extensive-form bargaining game. We establish the existence of a stationary subgame perfect equilibrium. Our main results are concerned with the characterization of equilibrium coalition structures. We develop an algorithm that generates such a structure. Our characterization results are especially sharp for symmetric partition functions.
(with Dilip Mookherjee), American Economic Review (Papers and Proceedings) 92, 253–259, 2002.
Summary. We explore the view, further developed in our other work, that inequality is an inevitable consequence of the market mechanism.