Abstract: "In this paper, I construct a theoretical model of dating and falling in love in an online environment. A relationship is an experimental, common value good and partners slowly learn its quality by observing private news. They always have the option to unilaterally break-up, go back to the website and, after some friction, be matched again with another partner. I construct the unique symmetric equilibrium of this game, which consists of a ”honeymoon” and a break-up phase. I also show the value of the website in the two extremes scenarios: non-friction dating and arranged marriage. Finally, I show that the value of the website in non-monotonic in the amount of friction. "
Abstract: "This paper studies a binary choice model where an agent makes a decision that is informed by his beliefs after observing a public signal. This model generalizes to a wide range of economic environments which require econometricians to estimate the beliefs of agents. With minimal structure imposed on the agent’s utility function, we characterize the structure of information needed to identify the beliefs of the agent after observing both signals and decisions. We find that the information must be sufficiently convincing and dense for the agent’s beliefs to be point identified. When the full range of information is relaxed, we show how the agents beliefs can be partially identified. Additionally, we explicitly show how the econometrician can construct the sharpest boundaries around the agent's beliefs, as she observes signals and decisions."
Muggers, drug dealers and militias. Theory and Evidence from Rio de Janeiro favelas (with Leonardo Rezende)
Abstract: "In this article, we develop a model to explain the choice between different criminal activities in favelas. In each period, criminals choose between being muggers, drug dealers, militiamen or working honestly. We show that this choice depends on the agent’s wealth, his community’s average wealth and the wealth of the communities near him. We also show that the transition from drug dealing to the militia is abrupt, even in the absence of externalities across criminal activities and that this change depends on the ratio between the favela’s wealth and the wealth of its vicinity. In the second part of this arcticle, we use an unique data set describing which criminal activities prevail in each favela and test the fit of the model. In our estimations, the effect of this ratio over the probability of a favela being ruled by a militia in opposition to drug dealers is estimated to be positive and significant. In the last section of the paper, we discuss the robustness of this result."