THE SPEAKER: Subir Chakrabarti, Indiana University - Purdue University Indianapolis.
TITLE: Equilibrium Contracts in Repeated Adverse Selection
Professor Chakrabarti studies the role that strategic behavior plays in determining market outcomes. This means that he investigates the incentives for firms to behave in certain ways. For example, will airlines collude to set specific prices, will internet companies increase market share even at the expense of current profits, will competing companies adopt similar strategies. His research also helps explain why some companies pro-actively engage in socially conscious activities even though they are not required by law to do so.
Society may want to understand the nature of very large firms and how they come to dominate their market place. Examples of such firms are Microsoft in computer software, Procter and Gamble in household goods, and Citibank in banking and finance. Understanding firm behavior is essential for determining whether a firm is very large due to good management or to illegal business practices.
Professor Chakrabarti’s current research projects include investigating whether there is a strategic behavior element in the savings decisions of individuals and investigating how insurance companies design contracts that appeal to individuals of the appropriate risk type.