2025 Zayira Ray
Julius Silver Professor, Faculty of Arts and Science,
Professor of Economics, New York University
Research Associate, NBER
Part-Time Professor, University of Warwick
Research Fellow, CESifo
Spool Member, ThReD

Department of Economics, 
New York University,
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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Cooperation in Community Interaction without Information Flows

(with Parikshit Ghosh), Review of Economic Studies 63, 491–519, 1996.

Summary. We study cooperative behavior in communities where the flow of information regarding past conduct is limited or missing. Players are initially randomly matched with no knowledge of each other’s past actions; they endogenously decide whether or not to continue
the repeated relationship. We define social equilibrium in such communities. Such equilibria
are characterized by an initial testing phase, followed by cooperation if the test is successful. It is precisely the presence of myopic types that permit cooperation, by raising barriers to entry into new relationships.

Contracts with Interdependent Preferences

(with Marek Weretka), February 2025.

Summary.  A principal contracts with a team of agents with interdependent preferences. We characterize cost effective contracts, and relate the direction of co-movement in rewards — “joint liability” (positive) or “tournaments” (negative) — to the assumed structure of preference interdependence.  We identify two asymmetries. First, the optimal contract leans towards joint liability rather than tournaments, especially in larger teams, in a sense made precise in the paper. Second, when the mechanism-design problem is augmented by robustness constraints designed to eliminate multiple equilibria, the principal may prefer teams linked via adversarial rather than altruistic preferences.

Group Formation in Risk-Sharing Arrangements

 (with Garance Genicot), Review of Economic Studies 70, 87-113, 2003.

Summary. We study informal insurance within communities, explicitly recognizing the possibility that subgroups of individuals may destabilize insurance arrangements among the larger group. We therefore consider self-enforcing risk-sharing agreements that are robust not only to single-person deviations but also to potential deviations by subgroups. Variant on an Example in the paper. A conjecture related to the paper.