Career concerns

[1] Team production, endogenous learning about abilities and career concerns, European Economic Review (2016), Volume 85, p. 229-244.

Abstract: This paper studies career concerns in teams where the support a worker receives depends on fellow team members׳ efforts and abilities. In this setting, by exerting effort and providing support, a worker can influence her own and her teammates׳ project outputs in order to bias the learning process in her favor. To manipulate the market׳s assessment, we argue that in equilibrium, a worker has incentives to help or even sabotage her colleagues in order to signal that she is of higher ability. In a multiperiod stationary framework, we show that the stationary level of work effort is above and help effort is below their efficient levels.

Economics of Artificial Intelligence

[2] Economics of Artificial Intelligence and Innovation, Journal of Economic Education (2022), Volume 53, Issue 2, p. 188-191.

Abstract: The author of this article describes the content of her course titled “Economics of Artificial Intelligence and Innovation.” The course is offered by the Department of Economics of Yale University at a senior undergraduate level. The author also teaches this course at the MBA program of the Yale School of Management in another format.

Incentive contracts and Innovation

[3] Strategic incentives for innovation and product market competition, International Journal of Industrial Organization (2017), Volume 52, p. 427-449, with Konstantinos Serfes (Drexel University).

Abstract: We consider a principal–agent model to provide a general analysis of how risk affects incentives of firms who invest in cost-reducing R&D and compete in the product market. We specify the conditions under which higher risk reduces incentives of all firms. We also examine the conditions under which an increase in risk may trigger opposite responses of rivals in the same industry: some firms will strengthen while other firms will weaken the incentives provided to their agents. This result holds regardless of the mode of competition in the product market, Cournot or Bertrand, as long as the rivals’ R&D decisions are strategic substitutes. It can generate new empirical implications and can provide an explanation for the lack of strong empirical support in the literature for a negative relationship between risk and incentives. We also discuss policy implications regarding the effect of risk on the incentives to innovate and welfare. 

[4] Incentive contracts under product market competition and R&D spillovers, Economic Theory (2015), Volume 58, Issue 2, p. 305-328.

Abstract: This paper studies cost-reducing R&D incentives in a principal-agent model with product market competition. It argues that moral hazard does not necessarily decrease firms’ profits in this setting. In highly competitive industries, firms are driven by business-stealing incentives and exert such high levels of R&D that they burn up their profits. In the presence of moral hazard, underprovision of R&D incentives due to risk sharing can generate considerable cost savings, implying higher profits for both rivals. This result indicates firms’ incentives to adopt collusive-like behavior in the R&D market. We also examine the agents’ contracts and the profits-risk relationship when cross-firm R&D spillovers occur. 

Industrial organization and Innovation

[5] Spillover feedback loops and strategic complements in R&D, Journal of Public Economic Theory (2019), Volume 21, Issue 6, p. 1126-1142

Abstract: This paper studies, in a two‐period model, the effects of knowledge spillovers among product market competitors on R&D levels. It argues that when firms' R&D decisions are strategic complements, in industries in which spillovers increase the marginal productivity of a firm's R&D, both incoming and outgoing spillovers spur R&D in equilibrium. Outgoing spillovers can foster innovation even in a homogeneous‐product industry. In these industries, the intellectual property law should be such that facilitates knowledge diffusion. If firms have power in deciding the level of knowledge spillovers, we show that a firm will choose to disclose its knowledge to its product market competitors. 

[6] Innovation, Patents and Trade: A Firm-level Analysis, Canadian Journal of Economics (2020), Volume 53, Issue 3, p. 949-981, with Kyriakos Drivas (University of Pireaus), Sarantis Kalyvitis (Athens University of Economics & Business, AUEB) and Margarita Katsimi (AUEB)

Abstract: Using microdata of firm exports and international patent activity, we find that Greek innovative exporters, identified by their patent filing activity, have substantially higher export revenues by selling higher quantities rather than charging higher prices. To account for this evidence, we set up a horizontally differentiated product model in which an innovative exporter competes for market share in a destination against many non‐innovative rivals. We argue that as the competition among the exporters of the non‐innovative product becomes more intense, the innovative firm exports more compared with its non‐innovative rivals in more distant markets, a prediction that is empirically confirmed in the dataset for Greek innovative exporters.

[7] University-firm competition in basic research: Simultaneous vs sequential moves, Journal of Public Economic Theory (2021), Volume 23, Issue 6, p. 1199-1219, with Rabah Amir (University of Iowa) and Christine Halmenschlager (Panthéon-Assas Université Paris II)

Abstract: This paper studies the endogenous timing of moves in a game with competition in basic research between a university and a commercial firm. It examines the conditions under which the two entities end up investing in innovation at equilibrium, both under simultaneous and sequential moves. It argues that when the innovation process is not too costly, under any timing, the firm conducts research despite the opportunities for complete free riding. The two sequential move games with either player as leader emerge as equilibrium endogenous timings, with both entities realizing higher profits in either outcome than in a simultaneous move game. Each entity also profits more by following than by leading. Finally, as a proxy for a welfare analysis, we compare the propensities for innovation across the three scenarios and find that university leadership yields a superior performance. This may be used as a selection criterion to choose the latter scenario as the unique outcome of endogenous timing.


Group formation: Contribute much with effort and little with ability (submitted), Appendix

Abstract: This paper studies compensation contracts offered to risk-averse agents when an agent's  individual production is influenced by her colleagues' effort and unknown ability. We examine the conditions under which a principal who commits herself to a life-time salary path induces an agent to help or sabotage her colleague. The principal may optimally allow for little sabotage in order to decrease the required insurance and to shift agent's focus on her own project. This paper also discusses group formation. It argues that firm profitability increases when production depends much on agents' effort and little on their (unknown) abilities. If commitment is not feasible, agents have incentives to help or sabotage because of career concerns. Such reputational incentives to influence market perception about the current peer's ability arise for permanently paired agents but also for agents who will be paired with another worker in the next period.


[1] "A theory of sex selection and human capital investment", with Dan Bernhardt (University of Illinois at Urbana-Champaign)

[2] "Peer effects in teams", Christos Genakos (Cambridge) and Konstantinos Serfes (Drexel)

[3] "Mimicking Human Behavior in the Stochastic Prisoner's Dilemma", with Himnish Humna.

[4] "Leadership and aggressiveness in a delegation R&D game with spillovers".