Research

Job Market Paper

Manager Allocation and Firm Dynamics

Coming Soon!, 2024

Abstract This paper studies how the allocation of managerial talent both between and within firms affects firm composition, dynamics, and the broader distribution of productivity across the economy. I build a firm dynamics model with frictional between-firm allocation and costly within-firm promotion of managers and derive the equilibrium implications of these forces to firm composition and aggregate productivity distribution. Using granular German employer-employee data, I analyze and quantify the impact of these channels on managerial position flows. Theoretical insights are confronted with empirical evidence to assess their implications for firm dynamics and overall productivity.

Working Papers

Opaqueness and Liquidity in Over-the-Counter Markets

Gabriel Toledo, Fernando Lopes, Ângelo Mendes, Working Paper, 2024 [paper] [slides]

Abstract We develop a model of search in OTC markets with asymmetric information and trade occurring under double-sided uncertainty over asset quality, where holding the asset does not necessarily translate into knowing its quality. This leads to deterioration of market information conditions over subsequent trades, causing both sellers and buyers to become more pessimistic even though aggregate asset quality remains unchanged. If re-trade opportunities are frequent, information in the economy becomes coarser, hindering market liquidity and volume of trade.

Shaping the Truth: History Distortion Post-Conflict

Gabriel Toledo, Daniel Monte, Working Paper, 2024 [paper]

Abstract How should information be transmitted to the next generation in the aftermath of a conflict? We propose a dynamic model where two groups engage in an infinite sequence of conflict games with evolving costs, observed only when there are conflicts. Without communication, conflict persists endlessly. Optimal communication by informed leaders generates peace cycles and balances the important trade-off between how likely peace will be versus how long it will last. This balance depends crucially on the baseline environment’s stability. In highly unstable environments, optimal communication mimics static Bayesian persuasion games. Conversely, in stable environments, optimal communication implies only slight distortions in conveying history.