Ce Liu

Ph.D. Candidate – Department of Economics

Research Statement

I am a microeconomic theorist interested in dynamic games and decision theory. I am particularly interested in the intersection of dynamic and cooperative games. My research in this area studies dynamic interaction in two-sided matching markets, as well as coalitions in repeated games. In a separate research agenda, I characterize testable implications of models of individual decision making. These include consumer demand model for expected utility decision makers, and models of costly information acquisition.

Research Statement

Job Market Paper

''Stability in Repeated Matching Markets''

Abstract: I develop a framework for studying repeated matching markets, where in every period, a new generation of short-lived agents on one side of the market is matched to a fixed set of long-lived institutions on the other. Within this framework, I characterize self-enforcing arrangements for two types of environments. When wages are rigid, as in the matching market for hospitals and medical residents, players can be partitioned into two sets: regardless of patience level, some players can only be assigned according to a static stable matching; when institutions are patient, the other players can be assigned in ways that are unstable in one-shot interactions. I discuss these results' implications for allocating residents to rural hospitals. When wages can be flexibly adjusted, institutions can be divided into a hierarchy of congested and uncongested segments. I use this hierarchical structure to characterize equilibrium payoffs, and as an application, show that repeated interaction resolves well-known non-existence issues: while static stable matchings may fail to exist with complementarities and/or peer effects, self-enforcing matching processes always exist if institutions are sufficiently patient.

Working Papers

''Conventions and Coalitions in Repeated Games'' (with S. Nageeb Ali) draft available upon request

[Presentation Slides]

Abstract: This paper develops a theory of repeated games for settings where coalitions may choose actions. We assume that members of coalitions cannot commit to long-run behavior (on and off the path) but coalitions can engage in short-term deviations. A convention reflects players' shared understanding of how history influences future behavior. We say that a convention is stable if at every history, no coalition of players can find profitable one-shot deviations. We prove that when monitoring is perfect in both non-transferable and transferable utility games, stable conventions can implement any payoff that is feasible and strictly individually rational so long as players are arbitrarily patient. Accordingly, coalitional deviations do not refine behavior beyond the folk theorem for sub-game perfect equilibria. By contrast, if members of a deviating coalition can transfer utility to each other secretly, a stable convention implements payoffs only within the β-core of the stage-game, and all such outcomes can be implemented as players become arbitrarily patient. We use these results to interpret how legal institutions can shape the behavior of individuals and coalitions through their expectations of future behavior, and why laws may be undermined when transfers are secret.

''Costly Information Acquisition'' (with Christopher P. Chambers and John Rehbeck) R&R Journal of Economic Theory

Abstract: We provide revealed preference characterizations for choices made under various forms of costly information acquisition. We examine nonseparable, multiplicative, and constrained costly information acquisition. In particular, this allows the possibility of unknown time delay for acquiring information. The techniques we use parallel the duality properties in the standard consumer problem.

Publication

''A Test for Risk-Averse Expected Utility'' (with Christopher P. Chambers and Seung-Keun Martinez) Journal of Economic Theory 163 (2016), 775-785

Abstract: We provide a universal condition for rationalizability by risk-averse expected utility preference in a demand-based framework with multiple commodities. Our test can be viewed as a natural counterpart of a classical test of expected utility, due to Fishburn (1975), in a demand setting.

Work in Progress

"Competition and Disclosure of Hard Evidence" (with Ilia Krasikov)