arXiv subjects

Matteo Bizzarri

Publications and source records attributed to Matteo Bizzarri.

4 recordsLinked to original sources

arXiv2026

Multilateral Market Power in Input-Output Networks

This paper models firm-to-firm trade in a production network as a set of double auctions. Firms have multilateral market power, namely, can affect prices in both input and output markets. The size and division of surplus are endogenous and depend only on technology, network position, and consumer preferences. The standard simplifying assumption of price-taking on input markets (unilateral market power) has systematic effects: it underestimates the final price and overestimates the surplus going upstream. These phenomena affect the model predictions for the welfare impact of mergers.

econ.TH↗

arXiv2024

The social value of overreaction to information

We study the welfare effects of overreaction to information in the form of diagnostic expectations in markets with asymmetric information, and the effect of a simple intervention in the form of a tax or a subsidy. A large enough level of overreaction is always welfare-decreasing and can rationalize a tax on financial transactions. A small degree of overreaction to private information can both increase or decrease welfare. This is because there are two competing externalities: an information externality, due to the informational role of prices, and a pecuniary externality, due to the allocative role of prices. When the information externality prevails on the pecuniary externality, the loading on private information in agents' trades is too small compared to the welfare optimum: in this case, a small degree of overreaction is welfare-improving.

econ.TH↗

arXiv2023

Homophily and infections: static and dynamic effects

We analyze the effect of homophily in the diffusion of a harmful state between two groups of agents that differ in immunization rates. Homophily has a very different impact on the steady state infection level (that is increasing in homophily when homophily is small, and decreasing when high), and on the cumulative number of infections generated by a deviation from the steady state (that, instead, is decreasing in homophily when homophily is small, and increasing when high). If immunization rates are endogenous, homophily has the opposite impact on the two groups. However, the sign of the group-level impact is the opposite if immunization is motivated by infection risk or by peer pressure. If motivations are group-specific, homophily can be harmful to both groups.

econ.TH↗

arXiv2020

Epidemic dynamics with homophily, vaccination choices, and pseudoscience attitudes

We interpret attitudes towards science and pseudosciences as cultural traits that diffuse in society through communication efforts exerted by agents. We present a tractable model that allows us to study the interaction among the diffusion of an epidemic, vaccination choices, and the dynamics of cultural traits. We apply it to study the impact of homophily between pro-vaxxers and anti-vaxxers on the total number of cases (the cumulative infection). We show that, during the outbreak of a disease, homophily has the direct effect of decreasing the speed of recovery. Hence, it may increase the number of cases and make the disease endemic. The dynamics of the shares of the two cultural traits in the population is crucial in determining the sign of the total effect on the cumulative infection: more homophily is beneficial if agents are not too flexible in changing their cultural trait, is detrimental otherwise.

q-bio.PE↗