I moved! I am now an associate professor of economics at UW-Madison. Here is a link to my new webpage.
We just finished revising “Search frictions and market power in price negotiated markets”. The focus of the paper has changed slightly, and we now include a detailed analysis of the incumbency advantage that emerges from search frictions and brand loyalty.
It’s official… I will be joining the economics department of Cornell University in July!
It’s official! NSF will fund our project “Measuring substitution patterns and market power in differentiated product industries”, co-authored with Amit Gandhi. A draft of the first paper will be posted soon. An incomplete version is available upon request.
Since pictures speak louder than words, here is a cool graph illustrating the consequences of using weak instruments to estimate mixed-logit models with aggregate data. The histogram corresponds to the Monte-Carlo distribution of parameter estimates obtained using the standard instruments used in the literature (e.g. number of competing products and sum of characteristics). The two densities use instruments based on exogenous measures of product differentiation: Differentiation IV’s.
An new version of “Price negotiation in differentiated product markets” is now available under a new title: Search frictions and market power is price negotiated markets. The new title reflects a change in the focus in the paper, from measuring market power in price negotiated markets, to quantifying the impact of search frictions when consumers must haggle to obtain discounts.
A new and improved version of our paper on the impact of horizontal mergers in price negotiation markets is now available as an NBER working paper (#19126). It is now titled “The effect of mergers in search markets: Evidence from the Canadian mortgage industry”, and includes a brand new model and simulation results. Here is a link.