I am a Post-doctoral Research Fellow at INET and a Visiting Scholar at the University of Cambridge.

My research interests are Microeconomic Theory. In particular, Public Economics and Network Economics.

I am on the job market and will be at CEEE, AEA, and RES.

My email is pabsta {at} gmail {dot} com (PGP key).

Click here for my Curriculum Vitae (or the link in the menu).

### Recent Publication:

Optimal Redistributive Pensions with Temptation and Costly Self-Control*International Tax and Public Finances.*

This paper is co-authored with Pr. Jean-Denis Garon.

### Working Papers (selection)

#### 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.

#### 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.

#### Decision-Making In Poverty, Savings and Redistribution

(Co-authored with Louis Perrault, PDF)

We conduct an optimal taxation analysis on a population of heterogenous individuals whose perceptions of savings' are linked to their contemporaneous disposable income and that of their parents. Individuals coming from poorer families see savings as less important than those from richer families. Perception of savings thus evolve because of cultural transmission through families, but also because of their current productivity. Aside from the standard equity/efficiency trade-off, optimal taxes account for this cultural transmission of perceptions through two additional channels. First, taxing labor decreases income, which decreases the perception of savings through time, generating a behavioural inefficiency. Second, taxation on savings corrects for the (ill)-perceived value of savings and thus savings' and labor decisions. Numerical simulations suggests the second effect is more important. An increase of 600 basis points on labour tax rates and a subsidy on savings of an order of 30% is shown to increase welfare.

### Research projects

Optimal Interbanking Networks: Controlled Cascade Failures Through Taxation

University Funding Rules and Research Performance (with Louis-François Brodeur)