Department of Economics
2211 Campus Drive, Evanston, IL 60208
Ph.D., Economics, Northwestern University, 2019
M.A., Economics, Northwestern University, 2019
M.A., Economics, University of Chile, 2013
B.S., Industrial Engineering, University of Chile, 2013.
Fields of Specialization
Job Market Paper
Other Research Papers
Persuasion in Global Games with Application to Stress Testing (joint with A. Pavan) (Slides) (Supplement) R&R American Economic Review
We study robust/adversarial information design in global games of regime change. We show that the optimal policy coordinates all market participants on the same course of action. Importantly, while it removes any “strategic uncertainty,” it preserves heterogeneity in “structural uncertainty”. When the designer is constrained to public disclosures, we identify conditions under which the optimal policy is a “pass/fail” test, as well as conditions under which the test is monotone in the banks’ fundamentals. Finally, we show that the benefits from discriminatory disclosures come from “dividing-and-conquering” the market, and relate them to the type of securities issued by the banks.
Selling Securities under Distress (joint with N. Figueroa) working paper
We revisit the question of how to sell securities to buyers endowed with private information, as in DeMarzo, Kremer, & Skrzypacz (2005). We consider a firm under distress that is forced to sell assets to improve its liquidity position. The firm maximizes revenue and fully discounts future payoffs associated with the underlying assets. We do not impose any constraint neither on the type of securities, nor on the selling mechanism the firm may use. When buyers’ private signals are informative in the MLRP sense, the only type of contracts the seller offers are debt contracts with face values monotonically ordered in buyers’ types. Furthermore, the optimal auction of securities satisfies the same qualitative properties found in standard auction design. Namely, the optimal allocation rule features (i) no distortion at the top; (ii) binding downward, local incentive constraints; and (iii) no rents at the bottom. We then ask whether the seller benefits from disclosing information to potential buyers. When asymmetric information of the latter represents different levels of optimism regarding the future asset’s payoffs and not a technological advantage over other bidders, the seller commits to a full-disclosure policy.
Prof. Alessandro Pavan (Committee Chair)
Prof. Michael Fishman
Prof. Jeff Ely