Selected Works and Working Papers.
1. Reasons for Peace: Peace talks are seldom successful (i.e., reach a lasting agreement) and since 1914, their success rate fell from 40 to 13 percent. In this paper, I model wartime negotiations, account for their declining success and characterize the welfare-maximizing (optimal) negotiation design. The model extends the reputational bargaining framework by allowing players to exert hidden effort preventing surplus destruction and military defeat. I find that the declining success of wartime negotiations can be rationalized by an increase in ceasefire (i.e., pauses in fighting) coinciding with negotiations. Intuitively, combatants only negotiate when fighting reaches a draw and a persisting draw prompts combatants to quickly reach an agreement. Ceasefires avoid costly fighting but ensure that a persisting draw is uninformative: thus combatants stall and are less likely to reach an agreement. I find natural conditions for when it is never desirable to negotiate during a negotiation. Nonetheless, the optimal negotiation may begin with a brief ceasefire and subsequently continues as combatants fight.
2. Optimal Sequential Experimentation: I study flexible, sequential experimentation. A decision-maker (DM) learns about a state by managing a jump-diffusion process with state-dependent dynamics. He controls the diffusion's precision and the state-dependent arrival rate of jumps, but faces convex flow costs increasing in the amount of acquired information. I find that an optimal pure-diffusion experiment exists. Intuitively, the DM cannot separately manage the precision and composition of acquired information. Hence, any optimal experiment (with jumps) equalizes the marginal benefits and costs of acquiring information from both types of processes. In contrast, if the DM did not have to explicitly experiment,
Zhong (2021) finds it optimal to learn from learning from a pure-jump.
3. The Game of Snake (Upcoming, latest research (early stage), slides available here): Technological progress is key to wealth generation and nations, consequently, invest heavily in research and development (R& D). Over time, however, the direction of research is increasingly narrow and unresponsive to new findings (Park et al 2023): thus, technological progress stalls. In this paper, I rationalize the trends above when a scientist's skills are valued outside of R&D and, in discovery, there are overall agglomeration gains. This is because new discoveries increases non-research productivity and thus its wages. Over time, rising, non-research wages prompts increasing concentration in scientific topics with decreasing social and private value.
4. Learning to Commit: I study the relation between limited commitment and learning in auctions. In each period, the seller sets the terms for an auction selling an indivisible good among multiple buyers; but if the item fails to sell, he cannot pre-commit to the terms of future offerings. I find that, in interdependent value settings, the seller's equilibrium revenues are greater than immediately running an efficient, Vickrey auction. In contrast with private value settings, this result persists regardless of how often the seller may interact with buyers. This is because learning among buyers both limits how many times a good can be gainfully re-offered and the information rents that each buyer can demand the seller. Intuitively, buyers lower their valuations in response to their peer's lack of interest. This progressively lowers the trade surplus and compresses the support of valuations. As the dispersion in valuations falls, the seller further extracts an increasing share of the remaining trade surplus.