09/29/2021
This week's colloquium speaker will be Zachary Kessler, a Ph.D. student in George Mason University's Department of Economics and an accomplished agent-based modeler. Zachary's talk entitled "An Agent-based Model of the O-Ring Theory of Development: Issues with Endogenous Skill Matching" is scheduled from 3-4:30. Zoom details follow.
We hope you can join us on Friday, October 1 at 3:00 p.m.
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Date
Friday, October 1, 2021
Time
3:00 pm - 4:30 pm EDT (UTC-4:00)
Title
An Agent-based Model of the O-Ring Theory of Development: Issues with Endogenous Skill Matching
Speaker
Zachary Kessler
Abstract
Kremer’s O-Ring Theory of Development (1993) represents an important effort to explain a collection of stylized facts from the economic development literature, most critically the large skill disparities between countries. This paper tests the theory by utilizing an agentbased model to add endogenous choice to workers’ behavior and examines the robustness of its results, determining if a collection of agents can sort themselves into the predicted equilibrium under a variety of circumstances. The agent-based approach reveals that in a world where countries possess a heterogenous number of tasks in their respective production functions, the skill matching in Kremer’s model cannot be reached. Instead, workers sort into a Nash equilibrium rather than the efficient outcome. Further, this result is shown to be robust to changes in productivity.
Author Bios
Zachary is a Ph.D. student in George Mason University’s Department of Economics who is an accomplished agent-based modeler.
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