Leo Oh, Rice University -- Baseball showcases a dynamic between pitchers and batters, where both players must act optimally to maximize their payoff. We frame this interaction as an independent sequence of static simultaneous games, specifically a zero-sum game where the expected run values are used as utilities. This paper aims to determine whether the players learn by updating their belief on the opponent’s probability of outcomes (PO) with two different models.
Roy Long, University of Chicago -- The game theoretic concepts of rationalizability and iterated dominance are closely related and provide characterizations of each other. Indeed, the equivalence between them implies that in a two player finite game, the remaining set of actions available to players after iterated elimination of strictly dominated strategies coincides with rationalizable actions. I prove a dimensionality result following from these ideas. I show that for two player games, the number of actions available to the opposing player provides a (tight) upper bound on how a player’s pure strategies may be strictly dominated by mixed strategies.
Michael Chen, Northwestern University -- Why do some poor countries exhibit rapid economic growth while others do not? Traditional growth models, which rely on factors of production, theorize that there will be economic convergence since there are diminishing returns to input growth, yet empirical evidence exists both for and against this theory. In this paper, I research the extent to which knowledge growth drives economic growth.
Yongzhe Wang, University of North Carolina, Chapel Hill -- This study reveals that commercial banking backgrounds of corporate executives negatively impact corporate innovation by reducing patent applications, researcher employment, and R&D expenses. The effects intensify as the number of executives possessing such backgrounds increases. A novel machine learning framework, ML-DID, is outlined to mitigate endogeneity concerns, including omitted variable bias and selection bias in the setting of “Panel Data with Multiple Treatment Timing.” Its robustness is tested against various specifications using the random forest algorithm. Additional analysis demonstrates that the impact of a banking background is strongest among firms with financial constraints and in less competitive industries.
Brendon Carter, University of Illinois Urbana-Champaign -- In 2014, after the Russian annexation of Crimea and the resulting Western sanctions on Russia, Russia responded by imposing a ban on most food imports from the sanctioning countries, which included the European Union, the United States, Canada, Norway, and Australia. This study uses a structural gravity model to empirically analyze the impacts of the Russian food embargo on bilateral trade flows, welfare, and prices, paying particular attention to the spillover impacts of this trade restriction on third countries, or countries outside of the ban. The key finding from this analysis is that many third countries underwent price impacts due to the embargo that were as large in magnitude as those for the directly-embargoed countries. The results of this analysis show that sanctions can have strong multilateral impacts that go well beyond their intended scope.
Tucker Saland, Princeton University -- The Russo-Ukrainian war had an asymmetric effect on cryptocurrency prices, with some cryptocurrencies appreciating and functioning as hedges against geopolitical risk, even as the rest of the market experienced a downturn. In the aftermath of the war, exchange-level data indicates that individuals in Russia and Ukraine purchased increased amounts of Tether, a stablecoin pegged to the US dollar. This paper has two objectives: (1) examine whether there exists a geopolitical risk premium in the cross-section of cryptocurrency returns using a rolling regression of excess weekly returns on the geopolitical risk index by Caldara, Iacoviello (2018) and control factors, and (2) understand the role of stablecoins during times of geopolitical turmoil.
