Incompatibility in markets with network effects can either benefit orharm consumers. Incompatibility reduces consumers' ability to "mixand match" components offered by different sellers, but can also beassociated with changes in product attributes that might benefitconsumers. In this paper, we...

Estimating market power is often complicated by the lack of reliable measures of marginal cost. Instead, policy-makers often rely on other summary statistics of the market, thought to be correlated with price cost margins---such as concentration ratios or the HHI. In many industries, these...

Product redesigns happen across virtually all types of products. While there is substantial evidence that new varieties of goods increase welfare, there is little evidence on the effect of product redesigns. We develop a model of redesign and exit decisions in a dynamic oligopoly model (a la...

Renewable fuel standards, low carbon fuel standards, and ethanol subsidies are popular policies to incentivize ethanol production and reduce emissions from transportation. Compared to carbon trading, these policies lead to large shifts in agricultural activity and unexpected social costs. We...

A basic tenet of economics posits that when consumers or firms don't face the true social cost of their actions, market outcomes are inefficient. In the case of negative externalities, Pigouvian taxes are one way to correct this market failure, where the optimal tax leads agents to internalize...

We document the numerical challenges we experienced estimating random-coefficient demand models as in Berry, Levinsohn, and Pakes (1995) using two well-known data sets and a thorough optimization design. The optimization algorithms often converge at points where the first- and second-order...

From 1864 to 1972, the real price of oil fell by, on average, over 1% per year. This trend dramatically broke when prices for crude increased by over 650% from 1972 to 1980. Policymakers adopted several policies designed to keep oil prices in check and reduce consumption. Missing from these...

For political and practical reasons, environmental regulations sometimes treat point-source polluters, such as power plants, differently from mobile-source polluters, such as vehicles. This paper measures the extent of this regulatory asymmetry in the case of nitrogen oxides (NO_x), the most...