Andrea Moro Webpage

We study a general class of models with social interactions that might display multiple equilibria. We propose an estimation procedure for these models and evaluate its efficiency and computational feasibility relative to different approaches taken to the curse of dimensionality implied by the multiplicity. Using data on smoking among teenagers, we implement the proposed estimation procedure to understand how group interactions affect health-related choices. We find that interaction effects are strong both at the school level and at the smaller friends-network level. Multiplicity of equilibria is pervasive at the estimated parameter values, and equilibrium selection accounts for about 15 percent of the observed smoking behavior. Counterfactuals show that student interactions, surprisingly, reduce smoking by approximately 70 percent with respect to the equilibrium smoking that would occur without interactions.

Since 1914, incumbent U.S. senators running for reelection have won almost 80% of the time. We investigate why incumbents win so often. We allow for three potential explanations for the incumbency advantage: selection, tenure, and challenger quality, which are separately identified from histories of election outcomes following an open seat election. We specify a dynamic model of voter behavior that allows for these three effects, and structurally estimate the parameters of the model using U.S. Senate data. We find that tenure effects are negative or small. We also find that incumbents face weaker challengers than candidates running for open seats. If incumbents faced challengers as strong as candidates for open seats, the incumbency advantage would be cut in half.

Slides most recent talk : 2004 Senatorial races outcome prediction

Slides: 1/2005

A stylized model of trade between identical countries is developed, where the only departure from standard neoclassical theory is that worker skills are imperfectly observable. This creates an informational externality since firms take aggregate investments into consideration when making inference about individual workers. The interaction between the informational externality and price effects generates a force in favor of specialization. Equilibria where comparative advantages in different industries arise endogenously exist even when the autarky model has a unique equilibrium.

External appendix : Slides of most recent talk : A larger paper with the more general theory (12/2000)

Why are trade barriers often used to protect home producers, even at the cost of introducing deadweight losses from higher commodity prices? We add an informational friction to the standard textbook argument in favor of free trade, and show that trade restrictions may be a moreefficient policy than a lump sum transfer to the displaced producers. Trade barriers, while generating deadweight losses, have the benefit that they do not generate a need for compensation. When the policy maker does not know the amount that should be transferred, the risk of over-compensating may make tradebarrier more efficient.

This is an application of a more general policy paper forthcoming in the AER