Ayush Gupta

Welcome! I’m a fifth year PhD student in the economics department at Boston University. My research focuses on organization economics, social learning, and game theory.

Research

Working Papers

Incentives, Supervision, and Limits to Firm Size [PDF] [SSRN]

This paper studies how incentive problems affect the size and structure of a firm (or any other organization) with one principal and many agents. We develop a model in which worker effort, supervision, and wages are determined endogenously. Our model generalizes much of the existing literature by making minimal assumptions about the production technology and the nature of supervision. Using a novel optimization technique, we establish necessary and sufficient conditions for the size of a firm to not be limited by incentive problems. We show that firms are limited to a positive, but finite, number of workers under reasonable assumptions. Firm size is unbounded only when worker productivity is sufficiently greater than the dis-utility of effort.

Utility Maximization Under Endogenous Uncertainty [PDF] [arXiv]

This paper establishes a general existence result for optimal decision-making when choices affect the probabilities of uncertain outcomes. We introduce a continuity condition – a version of upper semi-continuity for choice-dependent probability measures – which ensures upper semi-continuity of expected utility. Our topological proof does not require standard assumptions such as concavity of preferences or monotonicity of outcome distributions. Additionally, we identify sufficient conditions, including continuity of densities and stochastic dominance, which allow the main assumption to be verified in relevant economic contexts. These findings expand the applicability of expected utility theory in settings with endogenous uncertainty.

In Progress

Social Learning with Endogenous Timing and Payoff Externalities (with Jiahao Shen)

We study social learning in a model with asymmetrically informed agents, endogenous timing, and payoff externalities. In equilibrium, each agent employs a cutoff rule, and the most informed agents act first. When the number of agents and time periods is large, an initial herd copies the most informed agents. Eventually, however, the herd reverses and agents adopt the contrarian action. The resulting overshoot-and-reversal pattern matches puzzling dynamics observed in the global foreign exchange market and helps explain asset price bubbles in other markets, even when all agents are fully rational.

Teaching

Course Instructor

Introduction to Financial Economics (Undergraduate) - Harvard University (Spring 2025)

Teaching Fellow

Microeconomic Theory (Masters) - Boston University (Fall 2024)

Introductory Microeconomics (Undergraduate) - Boston University (Spring 2022; Fall 2022)

Economics of Less Developed Regions (Undergraduate) - Boston University (Fall 2021)

Economics of Sports (Undergraduate) - Boston University (Fall 2021)

Game Theory (Undergraduate) - University of Toronto (Fall 2017)

Intermediate Macroeconomics (Undergraduate) - University of Toronto (Summer 2017)

Contact

Email guptaayu [at] bu.edu