Matthew L. Elliott
Networked Markets; Network Games; Bargaining; Cascades on Networks; Search; Matching
Matt Elliott applies network theory to a variety of theoretical economic problems. By mathematically modeling complex interactions as a network, he distills these interactions into their mathematical essence, allowing him to develop theories that can eventually inform policy. One type of network is a networked market, in which the interactions among players are constrained in a way that can be represented as a network. For example, in a labor market, not everyone can be employed in every job, whether it's because they're not qualified, they don't have the requisite connections to get the job, or they simply aren't aware that there's an opening. Modeling these markets as a network allows him to identify and analyze inefficiencies.
Another kind of network is a financial network, and Elliott, together with Ben Golub (Harvard) and Matt Jackson (Stanford), is modeling the network of financial relationships among banks or countries to find out how one bank or country influences the rest. If one of those banks or countries experiences a financial shock, how might that trigger economic failure, and how does that failure spread throughout the network?
Elliott and Golub are also using network theory to better understand the provision of public goods. For example, a city might be considering imposing environmental restrictions on heavy industry that will reduce pollution and generate benefits for neighboring cities. Similar measures may be being considered by those neighboring cities. What prospect do these cities have for efficient cooperation? In this context, the researchers are analyzing a network that describes the benefits different cities can confer upon one another.
Before joining Caltech in 2012 as a visiting associate, Elliott was a postdoctoral researcher at Microsoft Research. In 2013, he also spent time as an ATI Visiting Fellow at the Chicago Booth School of Business, an INET Visitor at Cambridge University, and an ERID Visitor at Duke University. He received the Aliprantis Prize, joint with Golub for their work on public goods, from the Society for the Advancement of Economic Theory in 2012.