Games and Economic Behavior 6, 162-177, 1994.
Summary. Recent literature in the theory of dynamic games addresses renegotiatioin-proof equilibria, For repeated games, I analyze the limit of renegotiation-proof equilibrium sets as discounting vanishes. The main result states that such limit sets must either be singletons or belong to the Pareto frontier of the convex hull of the feasible set of the stage game payoffs.
(with Rajiv Vohra), Journal of Political Economy 128, 1789-1825 (2020).
Dedicated to Tapan Mitra — advisor, colleague and dear friend, whose sense of aesthetics, minimalism and rigor has been an inspiration to us. Tapan Mitra died on February 3, 2019.
Summary. A strategic situation with payoff-based externalities is one in which a player’s payoff is a function of her own action and the payoffs of other players. Every action profile therefore induces an interdependent utility system. A strategic situation is continuous if each such utility system is continuous. If each utility system is bounded, with a unique payoff solution for every action profile, we call the strategic situation coherent, and if the same condition also applies to every subset of players, we call the situation sub-coherent. A coherent, sub-coherent and continuous situation generates a standard normal form, referred to as a game of love and hate. Our central theorem states that every equilibrium of a game of love and hate is Pareto optimal, in sharp contrast to the general prevalence of inefficient equilibria in the presence of externalities. While externalities are restricted to flow only through payoffs there are no other constraints: they could be positive or negative, or of varying sign. We further show that our coherence, sub-coherence and continuity requirements are tight.
(with Garance Genicot and Laura Mayoral). December 2025.
Summary. This paper revisits the Great Gatsby curve that connects inequality to mobility, using panel data spanning several countries and time periods. Existing literature observes that the intergenerational elasticity of earnings is positively correlated with inequality, implying that mobility (viewed as the negative of that elasticity) decreases with inequality. In sharp contrast, we show that measures of upward mobility, axiomatically based on progressivity in income growth rates, are robustly and positively associated with baseline inequality. While there is no logical contradiction here, our study highlights crucial differences between mobility measures based on (lower) persistence and those based on growth progressivity, and asks the reader to align their choice of measure with foundational criteria that they feel best describe “mobility.” Our findings offer a re-interpretation of the Gatsby curve through the lens of shared prosperity, and have implications for the evolution of inequality within countries.