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Author Carrasco, J.A..; Yanez, R.
Title Sequential search and firm prominence Type
Year 2022 Publication Economic Theory Abbreviated Journal Econ. Theory
Volume 74 Issue 1 Pages 209-233
Keywords EQUILIBRIUM PRICE DISPERSION; CONSUMER SEARCH; INFORMATION; ECONOMICS; MODEL
Abstract We explore the role of prominence in equilibrium pricing in markets where search is sequential and random. Our model key feature is that more prominent firms are more likely to be sampled first. In contrast to ordered-search models, we find that more prominent firms inherit larger but less elastic demands, and as such have incentives to post larger prices. However, they might post lower prices but still charge higher markups than less prominent competitors only if they are also sufficiently more efficient. Our results suggest that when search is sequential, the role of prominence depends on whether it modifies the order or just the chances with which firms are sampled.
Address
Corporate Author Thesis
Publisher Place of Publication Editor
Language Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0938-2259 ISBN Medium
Area Expedition Conference
Notes WOS:000647491800002 Approved
Call Number UAI @ alexi.delcanto @ Serial 1373
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Author Carrasco, J.A.; Smith, L.
Title Search at the Margin Type
Year 2017 Publication American Economic Review Abbreviated Journal Am. Econ. Rev.
Volume 107 Issue 10 Pages 3146-3181
Keywords
Abstract We extend search theory to multiple indivisible units and perfectly divisible assets, solving them respectively with induction and recursion. Buyer demands and prices are random, and the seller can partially exercise orders. With divisible assets, the Bellman value function is increasing and strictly concave, and the optimal reservation price falls in the position, reflecting increasing holding costs (opportunity cost of delaying optionality for inframarginal units). The marginal value exists, and is strictly convex with a falling purchase cap density. Our model is amenable to price-quantity bargaining; e.g., greater buyer bargaining power is tantamount to greater search frictions.
Address [Carrasco, Jose A.] 2640 Diagonal Las Torres, Santiago, Chile, Email: jose.carrasco@uai.cl;
Corporate Author Thesis
Publisher Amer Economic Assoc Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 0002-8282 ISBN Medium
Area Expedition Conference
Notes WOS:000416398000010 Approved
Call Number UAI @ eduardo.moreno @ Serial 898
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Author Carrasco, J.A.; Carrasco, M.; Yanez, R.
Title An inexpert expert Type
Year 2022 Publication Applied Economics Letters Abbreviated Journal Appl. Econ. Lett.
Volume Early Access Issue Pages
Keywords Cheap talk; bias; informativeness; noise
Abstract We explore strategic information transmission when there is noise at the observation stage, when an expert observes signals, before he advises a policymaker. That is, the expert might be inexpert. We account for the fact that his signals might be totally uninformative, which is commonly known by players. We find that this inexpertise translates into a greater preference misalignment between players and that this yields a less informative equilibrium. We show that our results follow from the fact that the strategic effect of noise – the welfare change exclusive due to changes in the equilibrium partition – is always negative. Numerical simulations show that noise might be beneficial if the policymaker openly disagrees about noise chances. This makes the point that whether noise is beneficial or not crucially depends on how early in the game it arises, and also whether noise chances are commonly known by players or not.
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Corporate Author Thesis
Publisher Place of Publication Editor
Language Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 1350-4851 ISBN Medium
Area Expedition Conference
Notes WOS:000827531200001 Approved
Call Number UAI @ alexi.delcanto @ Serial 1618
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Author Carrasco, J.A.; Harrison, R.; Villena, M.
Title Interdependent preferences and endogenous reciprocity Type
Year 2018 Publication Journal Of Behavioral And Experimental Economics Abbreviated Journal J. Behav. Exp. Econ.
Volume 76 Issue Pages 68-75
Keywords Reciprocity; Endogenous preferences; Asymmetric evolutionary game
Abstract This paper employs an indirect approach to formally examine the evolutionary stability of interdependent preferences when players randomly engage in pairwise interactions. Following the model specification for altruism and spitefulness in experiments proposed by Levine (1998), we also explore the stability of reciprocity and reciprocal preferences. In particular, we study how individuals equipped with intrinsic preferences such as altruism, selfishness or spitefulness adjust their behavior depending on who they interact with. The key aspect of our method is that behavioral preferences are choice variables that optimally evolve, accounting for strategic interaction. Our model predicts that in a specific economic framework characterized by negative externalities and strategic substitutes, there is a continuum of evolutionary stable interdependent preference profiles: At least one player behaves spitefully, and at most one acts selfishly. The emergence of altruism as an evolutionarily stable preference crucially depends on how large the support for preferences is. When players have reciprocal preferences, altruism might arise even in meetings where one player is intrinsically spiteful, but not necessarily from the intrinsically altruistic player.
Address [Carrasco, Jose A.] Univ Adolfo Ibanez, Fac Ingn & Ciencias, 2640 Diagonal Las Torres, Santiago, Chile, Email: jose.carrasco@uai.cl;
Corporate Author Thesis
Publisher Elsevier Science Inc Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 2214-8043 ISBN Medium
Area Expedition Conference
Notes WOS:000445125300009 Approved
Call Number UAI @ eduardo.moreno @ Serial 914
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Author Reus, L.; Carrasco, J.A.; Pincheira, P.
Title Do it with a smile: Forecasting volatility with currency options Type
Year 2020 Publication Finance Research Letters Abbreviated Journal Financ. Res. Lett.
Volume 34 Issue Pages 10 pp
Keywords Volatility forecast; Volatility smile; Latin American markets; Currency options
Abstract We show that traditional measures of curvature and symmetry of the “smiles” improve volatility predictions in forex markets. We consider post crisis data at a daily basis for seven currencies vis a vis the American dollar: The British pound, the Euro, the Australian dollar, the Japanese yen, the Brazilian real and the Mexican and Chilean peso. While our results are robust to the option currency and maturity, they are particularly strong for latin-American currencies and options with longer maturity. We find that the simultaneous inclusion of skewness and kurtosis to a forecasting model significantly improves its predictive accuracy.
Address [Reus, Lorenzo; Carrasco, Jose A.] Univ Adolfo Ibanez, Fac Ingn & Ciencias, Santiago 2640, Chile, Email: lorenzo.reus@uai.cl;
Corporate Author Thesis
Publisher Academic Press Inc Elsevier Science Place of Publication Editor
Language English Summary Language Original Title
Series Editor Series Title Abbreviated Series Title
Series Volume Series Issue Edition
ISSN 1544-6123 ISBN Medium
Area Expedition Conference
Notes WOS:000551346400022 Approved
Call Number UAI @ eduardo.moreno @ Serial 1209
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