Pier-André Bouchard St-Amant


Postdoctoral research fellow, INET
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Curriculum Vitae

Research Interests

  1. Network Economics
  2. Microeconomics
  3. Public Economics

Working Papers

  1. Network Rigidities and the Business Cycle

    (PDF)

    I explore the impact of the network structure of trade on business cycles using a simple model of production. In particular, how much amplification and co-movements does the network structure generate? I show that the network amplifies the volatility of production, generates a common business cycle and increases the volatility of prices. I also explore what is the best way to reduce the impact of network shocks through production stabilization of a given region. I find that the optimal tax base should include all regions directly or indirectly trading with such region.

    Using data on the flow of commodities between american states, I test the predictions of the model and find results in line with the theory. I also use the model to estimate the probability of contagion between states using California and Texas as the ``epicenter'' of a downward shock. The network effect increases the probability of a downturn in direct trading states by 6\%. Using world data, I argue that an Eurotax would be preferable to a local tax to insure against Greek downturns.

    JEL CODES: L14, E32, E17, F17.

  2. Getting the Right Spin: A Theory of Value of Social Networks

    (Under review. PDF)


    I examine the problem of maximizing the spread of information in a context where users of a network decide which piece of information is shared. A company thus provides initial information to some users and they then choose what to share to their neighbours. These actions of sharing and choosing produce the characteristics of word-of-mouth advertising over time. I then answer the two following questions: what is the best word-of-mouth campaign that the company can perform and second, what is the value of such a campaign? The optimal solution can be understood as a Nash Equilibria that maximizes the concentration of the initial information to a small group of users. Such solution contrasts with standard measures of user influence and I show that they can sometime be seriously misleading. I provide an exact solution for a wide class of generic network topologies and an algorithm to compute it in polynomial time.


    JEL Codes: L1, D83, D85.

  3. University Funding Policies: Buildings or Citizens?

    (Under review. PDF)

    Governments fund public universities based on the number of registered students and lump sum transfers. Such policy induces universities to compete for student recruitment. I show that such rule can lead to an inefficient allocation of resources in which universities compete for the same students. I suggest a more efficient policy that achieves the social optimum for any given level of funding. Such funding rule should not be solely based on university's own enrolement, but also on enrolment in competing universities.

    JEL Codes: H52, I23, I28.

  4. Optimal Redistributive Pensions with Temptation and Costly Self-Control

    (With Jean-Denis Garon, revise and re-submit. PDF)


    We characterize an optimal redistributive pension scheme when individuals exert costly self-control in the face of temptation. We revisit the idea that this scheme reduces the cost of self-control. Individuals are heterogenous in both the intensity of their self-control problems and their productivity. Pensions simultaneously have three effects: redistributing income across retirees, forcing workers to save, and influencing the cost of exerting self-control. In the optimal policy, the effect of taxation on the cost of self-control is fundamentally related to the redistributive level of the pension system.Proportional pension taxation has an adverse effect on the mental of self-control when temptation declines with income. This partially offsets the forced-saving benefits of the system, and call for a more redistributive scheme. If temptation increases with income, taxation unambiguously reduces the cost of self-control only if the benefit structure taxes individuals for their contributions. Otherwise, taxation also increases such cost, unless the temptation problem is of weak intensity.This negative welfare effect gets worse when the intensity of self-control problems increases. These results contrasts with a first best optimum, where the mental cost of self-control is driven to zero and consumption is smoothed across periods.

    JEL Codes: H55, H21, D03.

  5. Externalities, Social Value and Word of Mouth: Notions of Public Economics on Networks

    (Under review. PDF)


    I examine an environment where advertisers can "seed" word-of-mouth advertising by providing initial information about a product to specific users of a social network. Discussion over a social network generates spillover effects for firms when consumers can use the social network to inform each other about products. When a firm can exploit a social network's structure, it can increase its sales. However, when the network formation process is costly, firms free-ride on such costs at the expense of agents on the network. If agents can form coalitions, I show that they can recoup the value of this externality by charging a toll.

    When users actively modify the information, generating word-of-mouth advertising about a product provides a "social value." This social value stems from the discussions that agents have about the product, without any intervention. Since this process occurs regardless of the firm's actions, the firm cannot capture such valuation. The opinion leaders, or highly regarded agents on the network, play a key role in the formation of this social value.


    JEL Codes: L1, D83, D85.

Research projects

  1. University Funding Rules and Research Performance (with Louis-François Brodeur)
  2. Optimal Redistributive Age-Dependent Taxation and Human Capital (with Louis Perrault)
English

Copyright Pier-André Bouchard St-Amant 2005-2014.