Working papers

Abstract We propose a mean-field game (MFG) set-up to study the dynamics of spatial agglomeration in a continuous space-time framework where trade across locations may follow a broad class of static gravity models. Forward-looking intertemporal utility-maximizing agents work and migrate in a twodimensional geography and face idiosyncratic shocks. Equilibrium wages and prices depend on their common distribution and adjust statically according to the underlying trade model. We first prove existence and uniqueness of the static trade equilibrium. We then prove existence of dynamic equilibria. In the case of Krugman (1996)'s racetrack economy, we obtain closed-form solutions for small sinusoidal perturbations around the steady state, and we identify the sets of parameters that lead to agglomeration or dispersion. We exploit the MFG structure of the model to explicitly quantify how uncertainty and forward-looking expectations contribute to agglomeration and dispersion. In particular, we show that, regardless of the static trade model, forward-looking expectations always promote agglomeration, but cannot reverse the dominant pattern that would arise under myopic behavior.
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Abstract This paper introduces the African Debt Database (ADD) -a new, comprehensive dataset that traces both domestic and external debt instruments at a granular level. The main innovation is a detailed mapping of Africa's domestic debt markets, drawing on rich, new data extracted from government auction reports and bond prospectuses. The database covers over 50,000 individual government loans and securities issued by 54 African countries between 2000 and 2024, amounting to a total of USD 6.3 trillion in debt. For each instrument, it provides harmonized micro-level information on currency, maturity, interest rates, instrument type, and creditor. The data reveal the growing dominance of domestic debt in Africa -albeit with substantial cross-country variation. Four stylized facts stand out: (i) the rapid expansion of domestic debt markets, especially in middle-income countries; (ii) the wide dispersion in borrowing costs and real interest rates; (iii) large cross-country differences in maturity structures and associated rollover risks; and (iv) a rising debt-service burden, particularly due to international bonds. Generally, this project shows that debt transparency is both feasible and valuable, even in data-scarce environments.
Keywords Africa, Domestic Markets, Development Finance, Public debt, Sovereign Borrowing
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Abstract In contrast to standard economic models, recent empirical evidence suggests that agents often operate based on subjective and divergent views of the competitive landscape. We develop a novel framework in which such imperfections are explicitly modeled through subjective perception networks, and introduce the concept of perception-consistent equilibrium (PCE), in which agents' actions and conjectures respond to the feedback generated by perceived competition. We establish the existence of equilibrium in broad classes of aggregative games. The model typically yields multiple equilibria, including outcomes that feature patterns of localized exclusion. Remarkably, heterogeneity in beliefs induces perceived competition rents-payoff differentials that arise purely from subjective misperceptions. We further show that PCE actions correspond to ordinal centrality measures, with eigenvector centrality emerging as a behavioral benchmark in separable payoff environments. Finally, a graph-theoretic taxonomy of PCEs reveals a hierarchical structure that ranks perceived competition rents. We also give conditions under which a unique stable equilibrium exists.
Keywords Eigenvector centrality, Perceived competition rent, Ordinal centrality, Bounded rationality, Exclusionary equilibria, Perception-consistent equilibrium, Competition
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Abstract This paper extends the standard two-period prevention model by incorporating anticipatory emotions. We introduce an additional cost, referred as the emotional load, which is endogenously determined by future risk but can be mitigated by current preventive effort. We show that a more intense emotional load incentivizes the emotional agent to increase investment in either self-insurance or self-protection. By contrast, greater uncertainty sensitivity has an ambiguous effect: It depends on the curvature of the emotional load function and wealth. When savings are substitutes, the effect of these parameters may diverge, whereas they align when savings are complements to risk prevention. Finally contrasting our setting with a setting without uncertainty or emotions, we show that, under prudence, the introduction of a zero-mean risk leads to a higher optimal level of self-insurance. Anxiety amplifies the incentive to reduce risk by lowering present well-being.
Keywords Uncertainty, Anticipatory emotions, Self-protection, Self-insurance
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Abstract Deviations from Bayesian updating are traditionally categorized as biases, errors, or fallacies, thus implying their inherent "sub-optimality." We offer a more nuanced view. In learning problems with misspecified models, we show that some non-Bayesian updating can outperform Bayesian updating.
Keywords Learning, Bayesian, Consistency
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Abstract We examine how the 2015 relaxation of China's one-child policy affected marriage outcomes. Before the reform, some groups were already permitted to have two children. In China, where the sex ratio is heavily skewed toward men, being exempt from the one-child constraint may have been a desirable characteristic for marriage, increasing men's marriage odds. Using detailed policy data on exemptions and individual data from 2010-2018, we find that after the relaxation, men previously allowed a second child are less likely to marry compared to those not allowed. There is no effect for women. The results suggest that differential fertility constraints distorted who got married by advantaging certain men when there was a demand for a second child and strong marriage competition. Furthermore, suggestive evidence shows that the relaxation increased matching by education when exemptions were moderately widespread, indicating that fertility constraints also shaped who married whom.
Keywords Fertility, Family planning, Marriage, China
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Abstract This paper introduces demotivation in the context of social comparison in networks. Social comparison is modeled as a status effect rewarding or penalizing agents according to their relative performance with respect to local peers. A demotivated agent faces both a reduced marginal return to effort and a psychological cost. In the absence of demotivation, social comparison leads to higher effort levels but reduces equilibrium welfare. Introducing demotivation leads to two main findings. First, it generates a network game of strategic substitutes. Second, despite the individual psychological costs incurred by demotivated agents, it can enhance overall welfare—by alleviating social pressure to exert effort and by generating positive externalities for peers.
Keywords Social Comparison, Demotivation, Networks, Strategic Substitutes, Equilibrium Welfare
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Abstract This paper provides a simple uni…ed axiomatic framework for appraising the central tendency of distributions of a single attribute (pie) among a collection of individuals depending upon the available measurement of the attribute. Two types of measurement are considered: cardinal and ordinal. For each of them, three properties are posited on an ordering of distributions of numbers among individuals. The two …rst properties are the anonymity requirement that permutations of the same list of numbers be equivalent and the weak Pareto requirement that a strict increase in the value of the variable for all individuals be favorably appraised. The third property requires that inverting the numerical measurement of the variable leads to an inversion of the ranking of the any two distributions to which the inversion is applied. The mean of a distribution is shown to be the only ordering of distributions consistent with cardinal measurability that satis…es those three requirements in the cardinal context while the median is the only such ranking consistent with ordinal measurability of the variable that sat-is…es those same requirement if the number of individuals is odd. If the number of individuals is even, then those three requirements applied to the ordinal context are shown to be inconsistent.
Keywords Consistency, Measurement, Ordinal, Cardinal, Median, Mean
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Abstract This article establishes a direct proof of the equivalence between two incomplete rankings of distributions of an ordinal attribute. The first ranking is the possibility of going from one distribution to another by a finite sequence of Hammond transfers. The second ranking is the intersection of two dominance criteria introduced by Gravel et al. (Economic Theory, 71 (2021), 33-80). The proof constructs an algorithm that provides a series of Hammond transfers, between any two distributions related by the intersection of the two dominances.
Keywords Hammond Transfers, Inequality, Algorithm
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Abstract Agricultural policies in poor rural developing countries have the potential to improve both household nutrition and agricultural income. But can these policy consequences be reconciled? This is not obvious because many policies are deficient. Moreover, in villages, mismatches have been observed between nutrition and profit indicators. However, incomes raised by such policies may generate nutrition improvement. In Niger, a major program directed to agro-pastoralists is the 3N Initiative. Do these policies enhance households’ agricultural profit and dietary intakes? And if so, is it because of an income effect, or through alternative channels? Using an agropastoral survey conducted in 2016 Niger, we find that livestock extension services that reduce calorie intake while improving diet diversity operate mostly through an increased household’s pastoral profit. In contrast, veterinary services and low-cost livestock feed programs improve diet diversity, but do not affect profit and calories. Because livestock extension services foster households specializing in cattle and sheep rearing and sometimes switching to transhumance, they restrict their access to energy-dense cereals. This generate a perverse consequence on caloric intakes, despite rising animal calories. Therefore, nutritional policy-makers should better account for agro-pastoralist access to cereal markets and monitor whether policies generate differential incentives, especially through profit, for specific specialization or lifestyle.
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