Jean-Baptiste Tondji

University of Texas Rio Grande Valley · Department of Economics and Finance

Business activities often involve a common agent managing a variety of projects on behalf of investors with potentially conflicting interests. The extent of the agent's actions is also often unknown to investors, who have to design contracts that provide incentives to the manager despite this lack of crucial knowledge. We consider a game between se...

We consider the problem of designing procedures that guarantee policy stability, efficiency, and inclusiveness. For this purpose, we introduce a sequential protocol that embeds clauses granting agents the right to oppose actions not in their interest, retract actions that face opposition, and punish harmful actions. Our analysis shows that coalitio...

How does justice affect individual incentives and efficiency in a political economy? We show that elementary principles of distributive justice guarantee the existence of a self-enforcing contract whereby agents non-cooperatively choose their inputs and derive utility from their pay. Chief among these principles is that your pay should not depend o...

The standard Bowen model of political competition with single-peaked preferences (Bowen, 1943) predicts party convergence to the median voter’s ideal policy, with the number of equilibrium policies not exceeding two. This result assumes majority rule and a unidimensional policy space. We extend this model to static and dynamic political economies w...

We develop a model of optimal lockdown policy for a social planner who balances population health with short-term wealth accumulation. The unique solution depends on tolerable infection incidence and social network structure. We then use unique data on nursing home networks in the US to calibrate the model and quantify state-level preference for pr...

We study the effects of race, network centrality, and policies that tolerate some level of virus spread (laissez-faire) on COVID-19 deaths in nursing homes in the United States. Our analysis uses unique data on nursing home networks and calibration-based estimates of states' preferences for health relative to short-term economic gains. Our findings...

In majoritarian democracies, popular policies may not be inclusive, and inclusive policies may not be popular. This dilemma raises the crucial question of when it is possible to design a policy that is both inclusive and popular. We address this question in the context of vaccine allocation in a polarized economy facing a pandemic. In such an econo...

Do the effects of government policy response to health crises differ for for-profit and not-for-profit organizations? We address this question through the lens of a two-sector continuous-time individual-based mean-field theoretical model that incorporates a non-random social network. Using unique data on nursing home networks in the United States,...

We develop a theory that addresses the problem of the existence of stable vaccine allocations in a political economy. These are allocation policies that a political leader can enforce without losing their popularity. Our analysis distinguishes between contexts where vaccination has positive externalities and contexts where it does not. We show that...

This study develops an economic model for a social planner who prioritizes health over short-term wealth accumulation during a pandemic. Agents are connected through a weighted undirected network of contacts, and the planner's objective is to determine the policy that contains the spread of infection below a tolerable incidence level, and that maxi...

Frequent violations of fair principles in real-life settings raise the fundamental question of whether such principles can guarantee the existence of a self-enforcing equilibrium in a free economy. We show that elementary principles of distributive justice guarantee that a pure-strategy Nash equilibrium exists in a finite economy where agents freel...

We examine whether owners' decisions to delegate corporate responsibilities to overconfident managers improve welfare. We develop a dynamic model with product differentiation, where firms compete in cost‐reducing research and development (R&D) and output. Before firms compete, each owner makes a strategic decision whether to hire an overconfident m...

We address the problem of finding the optimal lockdown and reopening policy during a pandemic like COVID-19, for a social planner who prioritizes health over short-term wealth accumulation. Agents are connected through a fuzzy network of contacts, and the planner's objective is to determine the policy that contains the spread of infection below a t...

The standard Bowen model of political competition with single-peaked preferences (Bowen, 1943) predicts party convergence to the median voter's ideal policy, with the number of equilibrium policies not exceeding two. This result assumes majority rule and unidimensional policy space. We extend this model to static and dynamic political economies whe...

We consider a setting where firms in the first stage invest in cost-reducing R&D. In the market stage, one firm sets a quantity, and another sets a price. We prove that the quantity-setting firm invests more in R&D, has a lower price, and produces higher quantity than the price-setting firm. We also consider welfare implications.

Was the majority rule the appropriate voting rule for the Brexit referendum? Why is the impeachment of the United States president decided under the majority rule while the president's actual removal from office is agreed under the two-thirds majority rule? Most political institutions use different voting rules to adopt different kinds of policies....

We consider a setting where firms first invest in cost-reducing R&D. In the market stage, one firm sets a quantity, and another sets a price. We prove that the quantity-setting firm invests more in R&D, has a lower price and higher quantity than the price-setting firm. We also show that such a mixed set-up may arise endogenously and consider social...

We consider the problem of designing legislative mechanisms that guarantee equilibrium existence, Pareto-efficiency, and inclusiveness. To address this question, we propose a finite-horizon voting procedure that embeds clauses of reciprocity. These clauses grant voters the right to oppose actions that are not in their interest, retract actions that...

Aguiar, Pongou, and Tondji (2018) propose the Shapley distance as a measure of the extent to which output sharing among the stakeholders of an organization can be considered unfair. It measures the distance between an arbitrary pay pro�file and the Shapley pay pro�file under a given technology, the latter profile defining the fair distribution. We...

Aguiar et al. (2018) propose the Shapley distance as a measure of the extent to which output sharing among the stakeholders of an organization can be considered unfair. It measures the distance between an arbitrary pay profile and the Shapley pay profile under a given technology, the latter profile defining the fair distribution. We provide an axio...

The unique properties of the Shapley value-efficiency, equal treatment of identical input factors, and marginality-have made it an appealing solution concept in various classes of problems. It is however recognized that the pay schemes utilized in many real-life situations generally depart from this value. We propose a nonparametric approach to tes...

We consider the problem of valuing inputs in a production environment in which input supply is uncertain. Inputs can be workers in a firm, risk factors for a disease, securities in a financial market, or nodes in a networked economy. Each input takes its values from a finite set and uncertainty is modeled as a probability distribution over this set...