Slave trades, credit records and strategic reasoning : four essays in microeconomics

Abstract: This thesis consists of four independent chapters, in which well-known economic theories are employed to investigate, and better understand, data and facts from the real world. Although in fairly distant topics, each paper is an example of how economics, and more precisely microeconomics, offers a rigorous and effective framework to reason about what happens around us. In this sense, my dissertation fully represents what I have learnt in these five years. The first paper addresses the experimental behavior of subjects that interact with each other, non-cooperatively, in a laboratory setup. The experimental evidence is found to be at odds with the predictions of classical game-theory, and I explore whether a model of bounded rationality can instead succeed in explaining the data. The second paper looks at another type of data, historical rather than experimental. Together with Björn Wallace, we raise doubts, methodological and interpretational, regarding the validity of a recent finding that documents a sizeable effect of Africa's past slave trades on current economic performance. The last two papers investigate the phenomenon of limited records, understood as the limited availability of past public data regarding a transacting partner. The former is a survey, written jointly with Giancarlo Spagnolo, wherein we discuss the literatures that have independently studied whether limited records may actually prompt beneficial reputation effects. We argue that what is known about this type of informational arrangement is little and scattered, and that this is problematic given the large number of real-life situations featuring limited records. These conclusions prepare the ground for the last paper of this dissertation, which presents a model of limited credit records. The model aims at providing a framework for evaluating the current privacy provisions in the credit market which mandate the removal of information about borrowers' past performance from public registers after a finite number of years.