Economics Seminar Series with Ben Golub

Ben Golub, Professor, Department of Economics Northwestern University. Ben Golub’s research focuses on social and economic networks, particularly in models of social learning, local public goods, peer effects, and the formation of social capital. A recurring theme is capturing aspects of networks through theory-based summary statistics that can be useful in empirical studies and policy analyses. He will be presenting:

Title: Robust Market Interventions

Abstract:  When can interventions in markets be designed to increase surplus robustly -- i.e., with high probability -- accounting for uncertainty due to imprecise information about economic primitives? In a setting with many strategic firms, each possessing some market power, we present conditions for such interventions to exist. The key condition, recoverable structure, requires large-scale complementarities among families of products. The analysis works by decomposing the incidence of interventions in terms of principal components of a Slutsky matrix. Under recoverable structure, a noisy signal of this matrix reveals enough about these principal components to design robust interventions. Our results demonstrate the usefulness of spectral methods for analyzing imperfectly observed strategic interactions with many agents.