About me

Ph.D. candidate in Economics at the University of California, Irvine

I am a macroeconomist broadly interested in models of frictional markets with sound micro-foundations. Until now, I have studied their application to monetary theory, over-the-counter financial markets, labor markets, and more recently, to the spread of a virus through social interactions. I am currently on the job market and will be available for virtual interviews at the 2020 EEA and 2021 ASSA meetings.

My research on Credit frictions and participation in over-the-counter markets was recently published in the Journal of Economic Theory. My paper Gradual bargaining in decentralized asset markets, joint with Guillaume Rocheteau, Tai-Wei Hu and Younghwan In, is forthcoming in the Review of Economic Dynamics.

In my job market paper, I study the spread of a virus in an environment where individuals gain utility from social interactions with one another. Witnessing the quick development of the COVID-19 outbreak as a major public health crisis at the beginning of 2020, the search-and-matching toolbox appeared particularly adapted to model at the micro level the social behavior of individuals trading off interactions with the risk of infection. The paper adds and contrasts two reaction margins in an otherwise typical epidemiological model of disease transmission: whether to engage in interactions (a participation margin), and whether to wear a mask (a precaution margin).

An important result is that the model with participation generates multiple equilibria. Equilibria can differ in terms of the duration of the epidemic, the number of active cases at its peak, or even the number of waves of infection. The multiplicity stems from a form of dynamic adverse selection: the fewer susceptible agents participate, the higher the prevalence of infection in the pool of participants, increasing the risk of infection in a given meeting and further driving susceptible agents away from the market. Equilibria can be selected by restricting equilibrium beliefs.

Multiple equilibria
Figure: Multiplicity of equilibria when agents can choose to withdraw from social interactions. Three examples are represented. Parameters and timeline are calibrated to the COVID-19 epidemic in the US.

The figure above presents three examples of equilibrium paths for the share of infected individuals (left panel) and the share of susceptible individuals who engage in interactions (right panel). The orange path is such that susceptible agents always coordinate on participating when it is also rational not to. The green path is such that in that situation, susceptible agents only coordinate on participating if less than 2% of the population is infected. The grey path is such that they coordinate on staying home from mid-March to mid-September, then get tired of staying home and coordinate on participating.

In my spare time, I enjoy road biking along the coast and in the moutains of Los Angeles. And though a French native, living in Southern California has turned me into quite a baseball fan. I love catching a game at Dodger stadium whenever I can.

Feel free to contact me at llebeau@uci.edu.