2025 Zayira Ray
Julius Silver Professor, Faculty of Arts and Science,
Professor of Economics, New York University
Research Associate, NBER
Spool Member, ThReD
Research Fellow, CESifo


Department of Economics, 
New York University,
19 West 4th Street
New York, NY 10012, U.S.A.
debraj.ray@nyu.edu, +1 (212)-998-8906.

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Oxford University Press, 2008. This book is now open-access; feel free to download a copy, and to buy the print version if you like the book.
≋ Three Randomly Selected Papers
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Inefficiency and the Golden Rule: Phelps-Koopmans Revisited

(with Tapan Mitra), in Sugata Marjit and Meenakshi Rajeev (eds), Emerging Issues in Economic Development: A Contemporary Theoretical Perspective: Essays in Honour of Dipankar Dasgupta & Amitava Bose, Oxford University Press, 2012.

Summary. We study the celebrated Phelps-Koopmans theorem in environments with nonconvex production technologies. We argue that a robust failure of the theorem occurs in such environments. Specifically, we prove that the Phelps-Koopmans theorem must fail whenever the net output of the aggregate production function f(x), given by f(x) − x, is increasing in any region between the golden rule and the maximum sustainable capital stock.

 

A Decision-Theoretic Basis for Choice Shifts in Groups

(with Kfir Eliaz and Ronny Razin), American Economic Review 96, 1321-1332, 2006.

Summary. The phenomenon of choice shifts in group decision-making has received much attention in the social psychology literature. Faced with a choice between a “safe” and “risky” decision, group members appear to move to one extreme or the other, relative to the choices each member might have made on her own. Both risky and cautious shifts have been identified in different situations. This paper demonstrates that from an individual decision-making perspective, choice shifts may be viewed as a systematic violation of expected utility theory. We propose a model in which a well-known failure of expected utility — captured by the Allais paradox — is equivalent to a particular configuration of choice shifts. Thus, our results imply a connection between two well-known behavioral regularities, one in individual decision theory and another in the social psychology of groups.

The Social Equilibrium of Relational Arrangements

(with Parikshit Ghosh),  forthcoming, Journal of Institutional and Theoretical Economics, Special Issue on Relational Contracts.

Summary. Building on Ghosh and Ray (1996), we study norms within partnerships that exhibit gradually increasing cooperation, thus serving to deter deviations. But socially beneficial gradualism may be undermined by partners renegotiating to greater cooperation from the outset. We show that incomplete information regard- ing partner patience ameliorates this tension even as it adds to the anonymity of the environment.