A Tangled Tale of Training and Talent: PhDs in Institutional Asset Management

Performance of investment products managed by firms in which PhDs play a key role is superior to the performance of products managed by otherwise similar firms. This relation is not a result of endogenous matching between firms and PhDs. Performance is related to training (the field of study) because economics or finance PhDs outperform other PhDs. Performance is also related to talent because PhDs who published in top outlets outperform other PhDs. Field-specific training is not relevant among the most talented PhDs because the performance gap between economics or finance PhDs and other PhDs disappears among published PhDs. This paper was accepted by Tyler Shumway, finance.

Endogenous Matching and Money with Random Consumption Preferences

Current money matching models employ either random matching or endogenous matching processes, both of which oversimplify the problem. We maintain that, although most economic interactions are intentional, some randomness remains. We offer an endogenous matching model of money with random consumption preferences. Our model preserves the intentionality of economic interactions while leaving scope for chance. We identify the conditions for potential monetary and nonmonetary equilibria and compare them to those of other endogenous matching and random matching models.

On the Spatial Diffusion of Cooperation with Endogenous Matching Institutions

This paper studies the spatial joint evolution of cooperative behavior and a partially assortative matching institution that protects cooperators. We consider cooperation as characterized by a cultural trait transmitted via an endogenous socialization mechanism and we assume that such trait can diffuse randomly in space due to some spatial noise in the socialization mechanism. Using mathematical techniques from reaction-diffusion equations theory, we show that, under some conditions, an initially localized domain of preferences for cooperation can invade the whole population and characterize the asymptotic speed of diffusion. We consider first the case with exogenous assortativeness, and then endogeneize the degree of social segmentation in matching, assuming that it is collectively set at each point of time and space by the local community. We show how relatively low cost segmenting institutions can appear in new places thanks to the spatial random diffusion of cooperation, helping a localized cultural cluster of cooperation to invade the whole population. The endogenous assortative matching institution follows a life cycle process: appearing, growing and then disappearing once a culture of cooperation is sufficiently established in the local population.

On the Spatial Diffusion of Cooperation with Endogenous Matching Institutions

This paper studies the spatial joint evolution of cooperative behavior and a partially assortative matching institution that protects cooperators. We consider cooperation as characterized by a cultural trait transmitted via an endogenous socialization mechanism a la Bisin and Verdier (2001) and we assume that such trait can diffuse randomly in space due to some spatial noise in the socialization mechanism. Using mathematical techniques from reaction-diffusion equations theory, we show that, under some conditions, an initially localized domain of preferences for cooperation can invade the whole population and characterize the asymptotic speed of diffusion. We consider first thecase with exogenous assortativeness, and then endogeneize the degree of social segmentation in matching, assuming that it is collectively set at each point of time and space by the local community. We show how relatively low cost segmenting institutions can appear in new places thanks to the spatial random diffusion of cooperation, helping a localized cultural cluster of cooperation to invade the whole population. The endogenous assortative matching institution follows a life cycle process : appearing, growing and then disappearing once a culture of cooperation is suffciently established in the local population.