Department of Economics
University College London
I am an Assistant Professor at the Department of Economics at University College London. I specialize in Economic Theory and Industrial Organization. I am interested in a wide range of topics such as dynamic nonlinear pricing of durable and storable goods, network and coalition formation, and secondary markets. Here is my .
I develop a model of collaboration between tournament participants in which agents collaborate in pairs, and an endogenous structure of collaboration is represented by a weighted network. The agents are forward-looking and capable of coordination; they value collaboration with others and higher tournament rankings. I use von Neumann-Morgenstern stable sets as a solution. I find stable networks in which agents collaborate only within exclusive groups. Both an absence of intergroup collaboration and excessive intragroup collaboration lead to inefficiency. I provide a necessary and sufficient condition for the stability of efficient outcomes in winner-takes-all tournaments. I show that the use of transfers does not repair efficiency.
Quantitatively, we investigate the allocative and welfare effects of secondary
markets for cars. An important source of gains from trade in these markets is
the heterogeneity in the willingness to pay for higher-quality (newer) goods,
but transaction costs are an impediment to instantaneous trade. Calibration of
the model successfully matches several aggregate features of the U.S. and
French used-car markets. Counterfactual analyses show that transaction costs
have a large effect on volume of trade, allocations, and the primary market.
Aggregate effects on consumer surplus and welfare are relatively small, but
the effect on lower-valuation households can be large.
This paper develops a model of nonlinear pricing of storable goods. We show
that storability imposes novel constraints on a monopolist's ability to
extract surplus. We then show that the attempt to relax these constraints
can generate cyclical patterns in pricing and sales, even when consumers are
homogeneous. Thus, the model provides a novel explanation for sales that
does not rely on discriminating heterogeneous consumers. Enriching the model
to allow for buyer heterogeneity in storage technology, delivers the
prediction that larger bundles are more likely to be on sale.
Work in progress
Dynamic demand and sequential monopoly: a model of endogenous screening,
joint with V. Bhaskar
A population of long-lived identical consumers shop with short-lived monopolists who use nonlinear pricing. Individual demand depends on the history of past purchases. We focus on the case in which consumers' purchase histories are private. In any equilibrium, consumers respond to a threat of surplus extraction by building up private information which leads to endogenous consumer heterogeneity. All sellers offer a large variety of bundle sizes paired with quantity discounts. Consumer privacy reduces distortions that are caused by sequential competition between sellers; it benefits sellers who meet with the consumers late in the game.