Joint work with Alonso Alfaro-Ureña. Revision solicited (R&R) at the American Economic Journal: Microeconomics.

Abstract. This paper develops a framework for the empirical analysis of the determinants of input supplier choice on the extensive margin using firm-to-firm transaction data. Building on a theoretical model of production network formation, we characterize the assumptions that enable a transformation of the multinomial logit likelihood function from which the seller fixed effects, which encode the seller marginal costs, vanish. This transformation conditions, for each subnetwork restricted to one supplier industry, on the out-degree of sellers (a sufficient statistic for the seller fixed effect) and the in-degree of buyers (which is pinned down by technology and by “make-or-buy” decisions). This approach delivers a consistent estimator for the effect of dyadic explanatory variables, which in our model are interpreted as matching frictions, on the supplier choice probability. The estimator is easy to implement and in Monte Carlo simulations it outperforms alternatives based on group fixed effects. In an empirical application about the effect of a major Costa Rican infrastructural project on firm-to-firm connections, our approach yields estimates typically much smaller in magnitude than those from naive multinomial logit.

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Joint work with Alonso Alfaro-Ureña and Jose Vasquez. Extended abstract (for conference submissions) available on request.

Abstract. We document an ample degree of dispersion of supplier quality, defined as the effect of a supplier’s inputs on its buyer’s sales, in the Costa Rican production network. Supplier quality also appears uncorrelated with buyer unobservables, suggesting the existence of both informational and spatial frictions affecting firms’ choice of suppliers. We quantify these two forces via a structural model of production network formation.

Joint work with Yaroslav Korobka. Extended abstract (for conference submissions) available on request.

Abstract. Borrowing tools from the practice of neural networks, I design an empirical framework for the analysis of “hierarchical networks:” socio-economic settings featuring multiple, layered networks, whose nodes are linked across layers. I use this framework to revisit questions involving networks of workers and fi rms.

Extended abstract (for conference submissions) available on request.

Abstract. I consider the problem of estimating the parameters of a game where players are allowed to play correlated equilibria (Aumann, 1974). I show that the existence of correlation between strategies is testable, and I develop an empirical application of the proposed estimator to assess spatial collusion in airline entry.