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Settlers, Slaves, and Merchants

In this project we look at all the migrants from Spain to the Spanish Empire (1492-1790). We expand and test current theories of the colonial legacies of imperial powers. Moreover, we assess how the quantity and quality of migrants affected economic growth in the Americas.

Checkers in Chinatown

In the 1974 motion picture Chinatown the private investigator J. J. “Jake” Gites (Jack Nicholson) is involved in a conspiracy that involved corruption, deceit and “family secrets.” The goal of the conspirators consisted on buying the lands of unsuspected farmers in the Owens Valley (some 400 miles north of Los Angeles) and then building an aqueduct to bring the water to the city, where it would be worth a fortune. Although, this description is fictional and far from reality, there is much controversy on the way the city of L.A. purchase the water and land rights in the Owens Valley.

Entry Games

We study firm entry decisions when firms have private information about their profitability. We generalize current entry models by allowing general forms of market competition and heterogeneity among firms. Post-entry profits depend on market structure, firms’ identities, and entering firms’ private information. We characterize the equilibrium in this class of games by introducing a notion of the firm’s strength and show that an equilibrium where players’ strategies are ranked by strength, or herculean equilibrium, always exists. Moreover, when profits are elastic enough with respect to the firm’s private information, the herculean equilibrium is the unique equilibrium of the entry game.

Water Auctions

During the reign of Ibn Hud (1228-1238), the Kingdom of Murcia enjoyed some prosperity and stability. After the weakening of the Almohads, Ibn Hud unified all the small muslim kingdoms (Taifas) in the peninsula. When Ibn Hud was murdered in 1238, the kingdom was dismembered into many Taifas. This same year Jaime I (King of Aragon) conquered Valencia and prepared to march south. Castile was also advancing to the south, expanding its territory at the expense of the now fragile Kingdom of Murcia, which territory was now a fraction of what it was under Ibn Hud. By 1242, Castile had conquered most of the kingdom. Ahmed, the son of Ibn Hud, traveled to Alcaraz (Toledo) to meet prince Alfonso (later known as King Alfonso X, the Wise ). They agreed that what remained of the Kingdom of Murcia would become a protectorate of Castile.

The cities of Mula and Lorca rejected this agreement. In April 1244, Alfonso was in Murcia with his army ready to attack Mula (the closest of the rebel cities). After Mula was conquered, the army moved to Lorca, which surrendered by the end of June. The government of Mula and Lorca was given to the Order of Santiago and the Order of the Temple, respectively. The government of the city of Murcia was given, in part, to the descendants of Ibn Hud according to the terms of the Alcaraz Treaty. However, the Order of Santiago and the Order of the Temple had absolute authority over the cities of Mula and Lorca respectively, because the cities were conquered by force. In each city, the Orders separated the ownership of land and water, and created a corporation with tradable shares, whose owners got money from selling in public auctions the rights to use the water from the river.

Inequality and Mobility

We are interested in historical inequality and social mobility. In particular we are interested in the role that women played on social mobility. Using historical Spanish sources we can measure women’s socioeconomic status (SES). We find that women’s SES had an important effect for both sons and daughters. The effects of fathers and mothers are gender-specific, with mothers having a stronger effect on daughters, and fathers having a stronger effect on sons.
Encouraged by the results with the Spanish sources, we developed an estimation method to compute the effect of mothers on their children, when measures of women’s SES are not available. We apply this method to 20th century US data and find that mothers SES had an important effect on their children’s SES. Moreover, we show that standard methods provide biased estimates of the effect of the father on his children, due the positive assortative mating between fathers and mothers.

Praying in the Desert

There is a long tradition of research investigating the relationship between geography/climate and economic outcomes (geographical determinism). More recently, this theory has been revised and the new research argues that the effect of geography on economic development might be indirect via institutions: geography affects institutions and institutions affect economic development. Our research shows that geography, and in particular the local climate, affects religious institutions and religious beliefs. Religious institutions then affect both secular institutions and economic development.

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