Julius Silver Professor, Faculty of Arts and Science, and
Professor of Economics, New York University

Co-Editor, American Economic Review
Research Associate, NBER
Part-Time Professor, University of Warwick

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

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THREE RANDOMLY SELECTED PAPERS:
Three more randomly selected papers. Or click here for RECENT RESEARCH, or use navbar and search icon at top of page to look for specific research areas and papers.

Groups in Conflict: Size Matters, But Not In The Way You Think

(with Laura Mayoral), December 2017.

Summary. This paper studies costly conflict over private and public goods. Oil is an example of the former, political power an example of the latter. Groups involved in conflict are likely to be small when the prize is private, and large when the prize is public. We examine these implications empirically by constructing a global dataset at the ethnic group level and studying conflict along ethnic lines. Our theoretical predictions find significant confirmation in an empirical setting

Anatomy of a Contract Change

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

SummaryWe 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. 

Information Aggregation in a Financial Market with General Signal Structure

(with Youcheng Lou, Sahar Parsa, Duan Li and Shouyang Wang), May 2019, forthcoming, Journal of Economic Theory.

Summary. We study a financial market with asymmetric, multidimensional trader signals that have general correlation structure. Each of a continuum of traders belongs to one of finitely many “information groups.” There is a multidimensional aggregate signal for each group. Each trader observes an idiosyncratic signal about the fundamental, built from this group signal. Correla- tions across group signals are arbitrary. Several existing models serve as special cases, and new applications become possible. We establish existence and regularity of linear equilibrium, and demonstrate that the equilibrium price aggregates information perfectly as noise trade vanishes. Combines and extends results in Parsa and Ray (2017) and Lou, Li and Wang (2017), both mimeo.