arXiv subjects

I. Sebastian Buhai

Publications and source records attributed to I. Sebastian Buhai.

6 recordsLinked to original sources

arXiv2026

When Does Social Discounting Favor the Young? Welfare Comparisons in Heterogeneous Economies

Social discounting is often interpreted as ranking young and old agents. In a heterogeneous economy, however, a social discount schedule does not determine a unique age ranking. The sign can reverse with the states being compared and may remain unidentified when common support is disconnected. I characterize when local young-old comparisons isolate age-related social priority rather than differences in private marginal values, constraints, or units. A coherent system of normalized welfare weights exists if and only if every supported path between the same states implies the same ratio. In a calibrated life-cycle economy, every retained local comparison favors the young, yet the aggregate ranking favors the old under one component normalization, favors the young on the largest shared component, and is unidentified when component scales are unrestricted.

econ.TH↗

arXiv2026

Reputation and Disclosure in Dynamic Networks

Public delay can be informative when the existence, custodian, and review dates of hard evidence are observed. I study a disclosure protocol in which a sealed record is docketed, held by a public custodian, and revealed only at terminal disclosure. At each review, retention is not silence: it rules out the states in which the holder would have relayed or disclosed. This censoring event yields an exact Bayesian filter. Under interval strategies, the public posterior is summarized by finitely many support endpoints. A compact reputation benchmark verifies Markov perfect Bayesian equilibria with such strategies and gives finite time resolution on compact unresolved slices. With two certified routes for the same record, retention on one route changes what remains feasible on the other before it acts. Common record censoring creates network value that pairwise formation can miss.

econ.TH↗

arXiv2026

The Geometry of Heterogeneous Extremes: Optimal Transport and Entropic Design

Extreme economic outcomes are not shaped by tails alone. They are also shaped by unequal access to opportunities. This paper develops a theory of heterogeneous extremes by taking the distribution of opportunity access as the object of study. In a mixed Poisson search setting, normalized maxima admit a Laplace mixture representation that yields order comparisons and a clean benchmark against the homogeneous economy. The main contribution is geometric: a canonical coupling turns differences in heterogeneity into optimal transport bounds for the whole induced law of extremes, the full schedule of top quantiles, and structured counterfactual paths between economies. The paper also derives a second order expansion that separates classical extreme value approximation error from heterogeneity effects. As a complementary normative exercise, it studies an entropy regularized design problem for reallocating opportunities under a mean constraint. A stylized labor market network application interprets heterogeneity as unequal access to job opportunities and shows how the framework can be used for tail counterfactuals and robustness analysis of top wage distributions.

econ.TH↗

arXiv2025

Wage Dispersion, On-the-Job Search, and Stochastic Match Productivity: A Mean Field Game Approach

Wage dispersion and job-to-job mobility are central features of modern labour markets, yet canonical equilibrium search models with exogenous job-offer ladders struggle to jointly account for these facts and the magnitude of frictional wage inequality. We develop a continuous-time equilibrium search model in which match surplus follows a diffusion process, workers choose on-the-job search and separation, firms post state-contingent wages, and the cross-sectional distribution of match states endogenously determines both outside options and the job ladder. On the theoretical side, we formulate the problem as a stationary mean field game with a one-dimensional surplus state, characterize stationary mean field equilibria, and show that equilibrium separation is governed by a free-boundary rule: matches continue if and only if surplus stays above an endogenous threshold. Under standard regularity and Lasry-Lions monotonicity conditions we prove existence and uniqueness of stationary equilibrium and obtain comparative statics for the separation boundary, wage schedules, and wage dispersion. On the quantitative side, we solve the coupled HJB and Kolmogorov system using monotone finite-difference methods and interpret the discretization as a finite-state mean field game. The model is calibrated to micro evidence on stochastic match productivity, job durations, tenure-dependent separation hazards, wage growth, and job-to-job mobility. The stationary equilibrium delivers a structural decomposition of wage dispersion into stochastic selection along job spells, equilibrium on-the-job search and the induced job ladder, and equilibrium wage policies with feedback through outside options. We use this framework to quantify how firing costs, search subsidies, and changes in match-productivity volatility jointly shape mobility, the job ladder, and the cross-sectional distribution of wages.

econ.TH↗

arXiv2025

Real Option AI: Reversibility, Silence, and the Release Ladder

We model the cadence of AI product releases, i.e. quiet spells, reversible patches, and rarer pivots, as optimal exercise of strategic real options under reputational learning. A privately observed technical state follows a diffusion. The firm controls two upgrade options with asymmetric costs and reversibility (a cheap patch and a costly pivot) and a publication-frequency clock, a Cox process whose intensity governs when noisy public performance and safety signals are disclosed. For sufficiently low clock costs the optimal policy posts observable clock-off windows around knife-edge regions. These windows shut down the martingale part of public beliefs, eliminate knife-edge mixing, and collapse behavior to a two-rung release ladder with endogenous triggers, jump targets, and no interior mixing. Within stationary Markov strategies we show that this ladder is uniquely characterized by a boundary-value system with value matching and smooth pasting at triggers and target optimality at jump targets. We endogenize market or platform adoption as a threshold rule in public beliefs and show that leverage creates an irreversibility wedge: the gap between first-best and levered surplus is bounded by the takeover switching cost of the least reversible rung. Patches are debt-insensitive; pivots can be distorted, but only up to that bound. The framework predicts telemetry signatures in firm-authored disclosures: a pre-release cadence dip in publication intensity and intra-month dispersion as the clock is shut off before a major reset; two post-release plateaus in disclosed performance, consistent with patch versus pivot jump targets; and debt-insensitive patch timing in high-reversibility regimes, with leverage effects concentrated in pivots. Unlike option-implied volatility spikes, these patterns reflect the firm's own throttling of technical signals rather than market pricing of event risk.

econ.TH↗

arXiv2022

A Social Network Analysis of Occupational Segregation

We propose an equilibrium interaction model of occupational segregation and labor market inequality between two social groups, generated exclusively through the documented tendency to refer informal job seekers of identical "social color". The expected social color homophily in job referrals strategically induces distinct career choices for individuals from different social groups, which further translates into stable partial occupational segregation equilibria with sustained wage and employment inequality -- in line with observed patterns of racial or gender labor market disparities. Supporting the qualitative analysis with a calibration and simulation exercise, we furthermore show that both first and second best utilitarian social optima entail segregation, any integration policy requiring explicit distributional concerns. Our framework highlights that the mere social interaction through homophilous contact networks can be a pivotal channel for the propagation and persistence of gender and racial labor market gaps, complementary to long studied mechanisms such as taste or statistical discrimination.

econ.TH↗