Julius Silver Professor, Faculty of Arts and Science, and
Professor of Economics, New York University
Research Associate, NBER
Part-Time Professor, University of Warwick
Council Member, Game Theory Society
Research Fellow, CESifo
Board Member, BREAD and ThReD
Researcher in Residence, ESOP

Department of Economics, NYU, 19 West 4th Street
New York, NY 10012, U.S.A.
debraj.ray@nyu.edu, +1 (212)-998-8906.

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Oxford University Press, 2008. This book is now open-access; feel free to download a copy, and to buy the print version if you like the book.
≋ Three Randomly Selected Papers
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Anatomy of a Contract Change

with Rajshri Jayaraman and Francis de Vericourt, American Economic Review 106, 316-358, 2016. Online Appendix.

Summary. We study a contract change for tea pluckers. Base wages increased while incentive piece rates were lowered or kept unchanged. Yet, in the following month, output increased by 20–80%. This response contradicts the standard model, is only partly explicable by greater supervision, and appears to be “behavioral.” But in subsequent months, the increase is comprehensively reversed. Our findings suggest that behavioral responses may be ephemeral, and should ideally be tracked over an extended period. 

Coalition Formation

(with Rajiv Vohra),  in Handbook of Game Theory Vol 4 (H.P. Young and S. Zamir, eds), Elsevier North Holland, 2014.

Summary. This chapter surveys a sizable and growing literature on coalition formation. We refer to theories in which one or more groups of agents (“coalitions”) deliberately get together to jointly determine within-group actions, while interacting noncooperatively across groups. The chapter describes a variety of solution concepts, using an umbrella model that adopts an explicit real-time approach. Players band together, perhaps disband later and re-form in shifting alliances, all the while receiving payoffs at each date according to the coalition structure prevailing at the time. We use this model to nest two broad approaches to coalition formation, one based on cooperative game theory, the other based on noncooperative bargaining. Three themes that receive explicit emphasis are agent farsightedness, the description of equilibrium coalition structures, and the efficiency implications of the various theories.

Maximality in the Farsighted Stable Set

(with Rajiv Vohra)   Econometrica 87(5), 1763–1779 Online Appendix.

Summary. The stable set of von Neumann and Morgenstern can be extended to cover farsighted coalitional deviations, as proposed by Harsanyi (1974), and more recently reformulated by Ray and Vohra (2015). However,  while coalitional deviations improve on existing outcomes, coalitions might do even better by moving elsewhere. Or other coalitions might intervene to impose their favored moves. We show that every farsighted stable set satisfying some reasonable, and easily verifiable, properties is unaffected by the imposition of this stringent maximality requirement.