International Society of Dynamic Games

Dynamic Games and Applications Seminar

Statistical discrimination without knowing statistics: blame social interactions?

April 25, 2024 11:00 AM — 12:00 PM (Montreal time)

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We consider a model where decision makers repeatedly receive candidates and assign to them a binary decision that we can interpret as hire/not hire. The decision makers base their decision on the characteristics of the candidate but they are also sensitive to the social influence exerted by the observed past choices of their peers. We characterize the long run frequency of decisions in the model, and show in particular that for candidates belonging to a group with ”un- favorable” characteristics, the dynamics increase the rejection rate compared to a scenario with independent decisions, suggesting that social influence between decision makers can generate effects very similar to those that result from statistical discrimination. We then analyze how the existence and magnitude of a reinforcement in rejection rates depend on different properties of the distribution of characteristics in the candidate population.

Dynamic Games and Applications Seminar

The social value of information in times of epidemic

April 4, 2024 11:00 AM — 12:00 PM (Montreal time)

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We analyze an epidemiological model in which individuals trade the costs and benefits of self-isolation while being uncertain about both their type and the dynamics of the epidemic. We characterize the unique symmetric equilibrium and show that uncertainty can be the cause of an additional wave of infections. We calibrate our model to the COVID-19 pandemic and simulate the dynamics of the epidemic under various scenarios to illustrate the impact of uncertainty on self-isolation behaviors. We show that uncertainty about the epidemic dynamics may be welfare improving, both in terms of fraction of deaths and average payoffs. (with Dominique Baril-Tremblay and Lucie Ménager)

Dynamic Games and Applications Seminar

The impacts of environmental policy on industrial allocation: a transboundary pollution dynamic game

March 28, 2024 11:00 AM — 12:00 PM (Montreal time)

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This paper analyzes a dynamic game between two trading regions that face a transboundary pollution problem. We study how the distribution of firms and trade costs affect the optimal emission policy of governments and how this policy would alter the allocation of the industry. The underlying microeconomic behavior is framed within the Economic Geography literature, in particular within the Footloose Capital Model (FCM). The macroeconomic model that arises is a transboundary pollution linear-quadratic dynamic game. We find that if the damage of pollution is high (low), the region with the larger industrial share reduces (increases) its emissions per firm, and that the steady state pollution reaches a minimum (maximum) when firms are fully concentrated in one region. Additionally, the strategic decisions of governments give rise to a new agglomerative force, absent in the FCM, which could lead to industrial activity fully concentrating in a core region.