9 research outputs found
Measuring Systemicness in the U.S. Insurance Industry
Parallel Sessions C: Financial Structure and Economic Volatilit
Discrete games in endogenous networks: Theory and policy
This paper develops a framework for analyzing individuals\u27 choices in the presence of endogenous social networks and implements it with data on teen smoking decisions and friendship networks. By allowing actions and friendships to be jointly chosen, the framework extends the literature on social interactions, which either models choices, taking the social network as given, or which models friendship selection without incorporating additional choices. In the context of a large population network game, this paper also introduces the notion of k-player Nash stability. This solution concept subsumes the Nash equilibrium and, as k decreases, gradually relaxes the assumptions of rationality and coordination underlying the Nash play. I show how the strategic interactions of the static one-shot play are embedded in an evolutionary model of network formation, which I estimate with social network data from United States high schools. The empirical analysis demonstrates the importance of modeling the joint decisions of friendships and smoking in evaluating existing and proposed new policies targeting teen smoking prevalence. These include policies related to school racial desegregation, separating middle and high school grades, and anti-smoking campaigns. Neglecting the endogeneity of the friendship network leads to a downward bias of 10% to 15% on the predicted effect of these policies on adolescent smoking rates
Housing Finance Across Countries : New Data and Analysis
This paper presents new data on the
depth and penetration of mortgage markets across countries.
There is a large variation across both dimensions of
mortgage market development, across countries, but also --
in terms of depth -- within countries. Mortgage markets seem
to develop only at relatively high levels of gross domestic
product per capita. Policies associated with financial
system development are also associated with mortgage market
development, including price stability and the efficiency of
contractual and information frameworks. The development of
the insurance sector and the stock market, sources of
long-term funding, is strongly associated with mortgage
market development, while government subsidies and support
are not. A benchmarking exercise compares the actual values
of mortgage market development to values predicted by
structural country factors and shows a large variation
across countries and over time in the gap between predicted
and actual values, related to specific policies but also
mortgage boom and bust cycles
Long-Run Equilibrium in the Market of Mobile Services in the USA
We develop an empirical model of the market for mobile services in the USA based on providers’ response functions. Guided by a duopoly model, we obtain our empirical response functions from an approximation of quarterly response data on smartphone subscriptions by sigmoid functions of time. The robustness analysis suggests that our model fits the data well and outperforms the regression model. Further, we demonstrate that our empirical response functions satisfy the conditions for semi-cyclic contractions which guarantee the existence, uniqueness and stability of long-run equilibrium