It is high stress time in the world of economics as we reach the heart of our very centralized job market. If you happen to be on a hiring committee this year, or are just interested in great new work by a group of young economists, let me hype five folks who are either my coauthors or else people I’ve spent an incredible amount of time discussing research with during grad school.
First, my coauthors. Jorge Lemus is an applied theorist and IO economist who works primarily on innovation-related topics. We have worked together for a few years on a paper about the economic theory of research lines (new draft coming this week!); I know firsthand how capable Jorge is in writing and solving interesting models. In addition to our work together, Jorge has two papers with Emil Temnyalov on patent trolls. The first paper investigates why firms might sell patents to “privateers” who go on to sue the original patentee’s rivals: because the privateer cannot be countersued, there is no “IP truce”, hence the patent is effectively stronger. This potential welfare benefit is contrasted with the fact that the privateer lowers industry profits and the privateer lowers the value of developing a defensive patent portfolio to countersue with in the first place. The second paper studies more traditional patent trolls in their entry deterrence versus monetization of ideas role. Unlike many theorists, though, he can also do interesting empirical work, such as his paper on pricing dynamics with Fernando Luco at Texas A&M.
My other coauthor on the market this year is Yasin Ozcan. We have two papers together on open access mandates. Yasin is my go-to guy when it comes to computationally intense empirical work. For our work together, we needed to merge hundreds of gigabytes of raw text patent applications with an enormous sample of academic medical research. He wrote code that efficiently scraped and matched everything with only a couple weeks of runtime on the server; I think the project would have taken me infinite time on my own. Yasin’s job market paper uses a ridiculous dataset matching M&A activity among all firms, including many which are not public, with the patent database. Essentially, when innovative firms acquire other innovative firms, who are they acquiring? Yasin shows that firms who do high quality research, measured in a variety of ways, tend to acquire firms that also do high quality research: there is assortative matching in the open innovation model. There are some interesting implications here for the boundary of the firm in entrepreneurial firms, as well as many more interesting questions to explore using this data.
Aside from my coauthors, there are three other economists who are, by dint of office placement many years ago, guys I frequently discuss new research with. Weifeng Zhong, a political economist, studies why it is sometimes autocracies that are the most business friendly (think of Dubai, China, or even England after Henry VIII). Essentially, nondemocratic states can perform lump-sum seizures (think China and rural land) which is relatively non-distortionary, and can use that revenue to pay politicians not to distort the economy is other ways. Democratic states prohibit such seizures, hence the politicians have little ability to earn money by stealing from the government coffers, hence the politicians do not need to be compensated heavily and therefore capital taxation can be low. In the middle, the politicians need to be paid off, but they can only be paid off using distortionary capital taxation. This summary, of course, is much less detailed that the model in the actual paper, which you ought read in detail!
Luciano Pomatto, a “high theorist”, doesn’t really need mentioning here: if you are in the market for a theorist, you must already know him. In addition to already having published in the AER and the Annals of Stats, even notes which Luciano wrote in his spare time are being cited in handbook chapters and annual reviews. His work covers everything from the epistemics of Bayesian games to the link between testability and Blackwell merging to the link between Hume and Popper’s scientific methods when scientists can act strategically to the nature of social welfare functions when inequality itself is a factor to a really cool paper linking cooperative and noncooperative games by applying forward induction reasoning to the concept of pairwise stability under incomplete information. The running joke in the office was that equilibrium refinements are a bit too applied of a topic to be discussed, but what’s amazing is that even though all of these papers are right at the technical cutting edge, the implications are essentially all understandable by the least theoretically-inclined economists out there: no math just for math’s sake here.
Finally, Emil Temnyalov, a coauthor with Jorge on the patent troll papers, has written a very nice paper on price discrimination with frequent flyer programs. Frequent flyer programs are revenue streams for airlines; they earn huge amounts of money “selling miles” to consumers via credit card promotions and the like. Might there then be a reason for the programs aside from loyalty? Emil shows that frequent flyer programs are useful as a tool for dynamic price discrimination when a good is perishable and demand is stochastic. Rare is it at this point to find a really nice application of dynamic mechanism theory. I confess that I am a frequent flyer nerd and have discusses arcane details of these programs with Emil many, many times.
All of these guys are also great company for the apocryphal beer (I can confirm this via direct experience!). In addition to the officemates and coauthors, let me mention a few other friends who I think do interesting work: it’s worth looking once more at Ludovico Zaraga and Anthony Wray, two historians who have spent many days in dusty archives (the mark of a real historian!) and who have benefited from attending Joel Mokyr University for the last few years, Mikhail Safranov, a theorist who can solve essentially any problem you throw his way, Chris Lau, my old basketball teammate who knows more about the economics of for-profit education than essentially anyone (and who has looked at these questions “properly”, by which I mean in the context of a structural choice model!), Ofer Cohen, who has developed a very interesting behavioral model of “mental accounting” with nice explanatory power in developing country household behavior, Shruti Sinha, our econometrics star who has a great technical paper on nonparametric identification in matching models, Andrew Butters, a very competent IO and energy economist who has a really important paper about how stochastic demand can muck up previous understanding of persistent productivity differences across firms, Bridget Hoffman, fresh back from running a study in India of who exactly is harmed or helped when nonmonetary rationing is used when distributing development aid, Esteban Petruzello, a well-trained IO economist who uses some cutting-edge demand system techniques to investigate the effectiveness of anti-smoking campaigns, and Juan David Prada and Matteo Li Bergolis, two macroeconomists and really nice guys who unfortunately work in an area where my background is simply too limited to offer any useful comments. Hopefully your university sees something interesting here, as I’m sure it will!
A Fine Theorem 