Ricardo Serrano-Padial Research Papers

Abstract: This paper studies information aggregation in pure common-value double auctions with a continuum of traders. This trade environment captures some of the main features of prediction markets. The population includes both strategic traders and non-strategic (naïve) agents, whose bidding behavior is not influenced by opponents’ equilibrium strategies. Existence and uniqueness of monotone equilibrium prices is shown under mild conditions on the distribution of naïve bids. In any such equilibrium, the mapping from asset values to prices has a domain split into two distinct areas: a revealing region, where prices equal values, and a non-revealing region. There is a strictly positive lower bound on this share below which prices are always fully revealing, and an upper bound above which prices are almost nowhere revealing. This indicates that, contrary to prevailing views, non-negligible levels of noise or liquidity trade are compatible with perfect information aggregation, although even moderate levels of noise can lead to nowhere revealing prices. An empirical method to distinguish between the revealing and non-revealing regions is suggested.

Abstract: This paper investigates the existence of bargaining mechanisms that induce trade with positive probability when agents are risk neutral, which constitutes a polar case not covered by existing no trade results. It is shown that a quasi no-trade theorem holds in the bilateral case: if the distributions of traders' private signals are continuous, no equilibrium with positive probability of trade exists in any trade environment with pure common values. With discrete distributions trade only occurs when the seller and the buyer receive their lowest and highest signals, respectively. A counterexample in which trade happens with probability one is provided to show that the result fails to hold when there are more than two traders. A property of multilateral mechanisms eliciting trade is that buyers' payments cannot equal expected conditional values almost everywhere. This implies that trade is incompatible with perfect information revelation in common value environments.

Abstract: Despite predictions of complete free riding in one shot public good games, repeated interaction allows for any level of public provision, so long as it is feasible and Pareto superior to no provision at all. I investigate the long run effects of weakening the information players have about each others' preferences. I find that when agents are patient enough any provision level can be attained in the long run.

Abstract: The past decades have witnessed a rapid growth in contingent employment that may expose workers to a higher poverty risk via limited job stability, few advancement opportunities, and low wages. Using Spanish data from the European Community Household Panel and maximum-likelihood binary models that account for state dependence and unobserved heterogeneity, we examine the poverty implications of past and current temporary employment. Our findings suggest that fixed-term contracts raise the poverty exposure of women and older men relative to open-ended contracts. Furthermore, the poverty implications of temporary employment are long lasting due to feedback effects operating via employees’ current work statuses. Finally, the adverse impact of temporary employment seems to be linked to the short duration of six-month contracts, thus signaling the importance of work attachment.

Abstract: Focusing on Spain, where fixed-term workers account for a third of the wage and salary workforce, we examine the wage growth implications of fixed-term employment of varying duration while distinguishing between wage growth occurring on-the-job versus via job mobility. Wage growth among employees with indefinite work contracts largely occurs via job mobility, whereas fixed-term workers gain via job mobility as well as on-the-job. Consequently, job stayers with fixed-term contracts a year ago narrow their wage gap with respect to similar counterparts with indefinite-term contracts. Yet, this effect is solely driven by the 10.5 percentage points higher wage growth experienced by fixed-term workers with 6-months contracts able to keep their jobs beyond their initial contract period. Given the limited number of short-term temporary workers in those circumstances, the overall wage gap between past fixed-term and indefinite-term workers is unlikely to vanish in the near future.

Summary: The U.S. debate over the role of contingent or temporary employment, especially for low-income workers, has its counterpart within other developed nations. This article offers an overview of contingent employment in Spain, where more than a third of the workforce is employed in temporary (“fixed-term”) positions and where unemployment is around 11 percent. The authors investigate possible differences in the earnings and poverty implications of fixed-term employment for men and women and among employees with shorter- versus longer-term work contracts. Workers with fixed-term and other nonstandard work arrangements are typically younger, less educated, less skilled, and earn lower incomes than their counterparts with open-ended contracts. Fixed-term workers also endure poverty rates nearly five times larger than employees with indefinite contracts. Finally, the study also suggests that not all short-term work is created equal. In particular, men and women holding shorter-term fixed contracts of up to one year display the highest rates of persisting poverty among all workers, whereas fixed-term contracts lasting at least one year are associated with lower levels of poverty. To the extent that fixed-term work accounts for a substantial proportion of all employment in the economy, the authors emphasize the need to gain a better understanding of the poverty implications of short-term work.