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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Too Good To Be True? Retention Rules for Noisy Agents

(with Francisco Espinosa), revised January 2022, forthcoming American Economic Journal: Microeconomics. Supplementary Appendix.

Summary. An agent who privately knows his type (good or bad) seeks to be retained by a principal. A principal seeks to retain good agents. Agents signal their type with some ambient noise, but can alter this noise, perhaps at some cost. Our main finding, that we examine in several extensions, is that in equilibrium,  the principal treats extreme signals in either direction with suspicion, and retains the agent if and only if the signal falls in some intermediate bounded set. In short, she follows the maxim: “if it seems too good to be true, it probably is.”  

Polarization: Concepts, Measurement, Estimation

(with Jean-Yves Duclos and Joan Esteban), Econometrica 72, 1737–1772, 2004.

Summary. We develop the measurement theory of polarization for the case in which income distributions can be described using density functions. The main theorem uniquely characterizes a class of polarization measures that fits into what we call the “identity-alienation” framework, and simultaneously satisfies a set of axioms. Here is a link to a somewhat expanded version, which was published in C. Barrett (ed), The Social Economics of Poverty: Identities, Groups, Communities and Networks, London: Routledge (2005).

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.