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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Information Aggregation in a Financial Market with General Signal Structure

(with Youcheng Lou, Sahar Parsa, Duan Li and Shouyang Wang),  Journal of Economic Theory 183, 594–624 (2019).

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. Correlations 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. Online Appendix.

The Time Structure of Self-Enforcing Agreements

Econometrica 70, 547–582, 2002.

Summary. A principal and an agent enter into a sequence of agreements. The principal faces an interim participation constraint at each date, but can commit to the current agreement; in contrast, the agent has the opportunity to renege on the current agreement.  We show that every constrained efficient sequence must, after a finite number of dates, exhibit a continuation that maximizes the agent’s payoff over all such sequences. 

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.