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The main challenges in estimating strategic network formation models are the presence of multiple equilibria, and the fact that the number of possible network configurations increases exponentially with the number of players. I propose a dynamic model of strategic network formation with heterogeneous players, which converges to a unique stationary(More)
This paper develops a framework for analyzing individuals' choices in the presence of endogenous social networks and implements it with data on teen smoking decisions and friendship networks. By allowing actions and friendships to be jointly chosen, the framework extends the literature on social interactions, which either models choices, taking the social(More)
I develop a dynamic heterogeneous agents model of strategic network formation, where a matching technology and preferences for same-type individuals drive the dynamics of friendship. The model converges to a unique stationary distribution that is structurally estimated using Markov Chain Monte Carlo methods and stochastic approximation techniques. I use(More)
This paper develops a dynamic monopolistic competition model with het-erogenous firms to analyze the effects of uncertainty on international trade. We characterize a stationary equilibrium, with N symmetric countries, where firms' productivities evolve stochastically over time. Our model retains the main results of previous recent papers like Melitz (2003)(More)
Dynamic agency models with endogenous state variables or many agents are numerically intractable, or at least very difficult to solve. This problem prevented researchers from analizying an important class of economic problems, e.g. extensions of the basic unemployment insurance framework, models of international risk sharing in production economies with(More)
A key target of the U.S. health policies is to reduce costly adverse birth outcomes to which prenatal smoking is one of the most significant contributors. This paper represents the first attempt to examine whether implementing the minimum cigarette purchase age of 21 can curb smoking among young mothers and thus improve their newborn's health. The research(More)
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