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Pierre Dubois
n° 25-1674, octobre 2025
We examine pharmaceutical regulations and incentives for innovation from an international perspective, highlighting the public good nature of healthcare innovation and its cross-border diffusion. We summarize the empirical evidence on how push and pull incentives shape R&D investment,...
Patrick Fève et Alban Moura
n° 25-1673, octobre 2025
We propose to measure business cycles using vector autoregressions (VARs). Our method builds on two insights: VARs automatically decompose the data into stable and unstable components, and variance-based shock identfication can extract meaningful cycles from the stable part. This method has...
Shota Ichihashi et Alex Smolin
n° 25-1672, octobre 2025
In markets where algorithmic data processing is increasingly prevalent, recom-mendation algorithms can substantially affect trade and welfare. We consider a setting in which an algorithm recommends a product based on its value to the buyer and its price. We characterize an algorithm that maximizes...
Alex Smolin et Takuro Yamashita
n° 25-1671, octobre 2025
We study information design in games where players choose from a continuum of ac-tions and have continuously differentiable payoffs. We show that an information structure is optimal when the equilibrium it induces can also be implemented in a principal-agent contracting problem. Building on this...
Dirk Bergemann, Alessandro Bonatti et Alex Smolin
n° 25-1670, octobre 2025
We develop an economic framework to analyze the optimal pricing and product design of Large Language Models (LLM). Our framework captures several key features of LLMs: variable operational costs of processing input and output tokens; the ability to customize models through fine-tuning; and high-...
vol. 153, octobre 2025, p. 131–144
A monopoly seller is privately and imperfectly informed about the buyer's value of the product. A designer can provide the seller with additional information, which the seller uses to price discriminate the buyer. We demonstrate the difficulty of screening the seller's information: When the buyer's...
Andreea Enache et Andrew Rhodes
vol. 256, n° 112635, octobre 2025
Many platforms use Price Parity Clauses (PPCs) to prevent sellers charging lower prices elsewhere. In a setting where PPCs affect platforms’ data acquisition, we show that buyers and sellers may benefit from PPCs when the market is young.
Jeffrey A. Friedman
octobre 2025
This article analyzes more than 60,000 assessments of uncertainty made by national security officials from more than forty NATO allies and partners. The findings show that national security officials are overwhelmingly overconfident and that their judgments are especially prone to false positives....
David Martimort et Wilfried Sand-Zantman
vol. 34, n° 3, octobre 2025, p. 696–713
We analyze the effect of media mergers in a model that stresses, on the one hand, the fact that media are two-sided platforms willing to attract advertisers and viewers and, on the other hand, that strong competitors have emerged to challenge traditional media on both sides. We show that a merger...
Tiziano De Angelis, Fabien Gensbittel et Stéphane Villeneuve
septembre 2025
We construct Nash equilibria in feedback form for a class of two-person stochastic games of singular control with absorption, arising from a stylized model for corporate finance. More precisely, the paper focusses on a strategic dynamic game in which two financially-constrained firms operate in the...
