Date:
Tuesday, October 25, 2022, 12:00pm to 1:15pm
Location:
Hanson Mason, Littauer 3rd Floor Lounge
Xinyue Lin
Title: "Shock Transmission Through Labor Network" joint with Sophia Mo
Abstract: TBD
Shani Cohen
Title: "Cursed Investment"
Abstract: Evidence for overinvestment and investment cyclicality show up in various industries as well as in the rate of failures of new businesses. I show that cursed equilibrium can provide a theoretical foundation for the phenomenon of overinvestment. In the presence of uncertainty, cursed investors receive signals about the state of the world and make a prediction about the level of investment others will undertake. While their prediction for others' investment is correct on average, they miss the correlation between the others' behavior and the state of the world.