Tuesday, April 21, 2015 - 4:00pm
Event Calendar Category
LIDS Seminar Series
Univ. of Pennsylvania
Building and Room Number
This seminar will introduce a model of endogenous network formation and systemic risk in which strategic agents form networks that efficiently trade off the possibility of systemic risk with the benefits of trade. Efficiency is a consequence of the high risk of contagion, which forces agents to endogenies their externalities. Second, fundamentally safer economies generate much higher interconnectedness, which in turn leads to higher systemic risk. Third, the structure of the network formed depends on whether the shocks to the system are believed to be correlated or independent. This underlines the importance of specifying the shock structure before investigating a given network because a particular network and shock structure could be incompatible.
Prof. Rakesh Vohra is an expert in mechanism design, an area of game theory that brings together economics, engineering, and computer science. His research focuses on the best ways to allocate scarce resources when the information required to make the allocation is dispersed and privately held. His work has been critical to the development of game, auction, and pricing theory. Previously he taught at Northwestern University, where he was the John L. and Helen Kellogg Professor of Managerial Economics and Decision Sciences in the Kellogg School of Management with appointments in the Department of Economics and the Department of Electrical Engineering and Computer Science.
Reception to follow.