Curriculum Vitae: CV

Research

Publications

Heterogeneous Impacts of Cost Shocks, Strategic Bidding, and Pass-Through: Evidence from the New England Electricity Market [paper]  American Economic Journal: Microeconomics 14(2): 370-407,  2022    (publisher link to paper),  Online Appendix

Abstract: Industry-wide shocks can have heterogeneous impacts on firms' costs due to different firm characteristics. The heterogeneity in these impacts is crucial for understanding the pass-through of the shock, because of its implications on strategic competition. In the context of the gas price shock in the electricity market, I develop a method to identify heterogeneous impacts of the shock and show with a structural analysis that the heterogeneous feature of the shock induces markup adjustments of firms. Pass-through that is estimated without incorporating the existing heterogeneous impacts fails to reflect the change in competition arising from the shock, and is, on average, underestimated.

Cleaner but Volatile Energy? The Effect of Coal Plant Retirement on Market Competition in the Wholesale Electricity Market  [paper] Accepted for publication at  RAND Journal of Economics

Abstract: Energy transition from coal to gas is reshaping the power sector to rely more on gas generation, which is cleaner but has more variable input costs. Using counterfactual analysis, I study the competitive effects of this transition, considering several transition paths that differ in the types of firms involved in retiring coal plants and investing in gas plants. I show that the variable nature of the marginal cost of gas generation creates an environment in which market power could increase after the transition. However, the transition's impact on competition depends on the characteristics of the firms investing in new gas generation; the adverse impact is mitigated under a well-planned transition that leads to a more competitive industry structure.

Working Papers and Projects

Strategic Uncertainty, Competition, and Asymmetric Pass-Through [paper], submitted

Abstract: Asymmetry is a pervasive feature of price transmission and economic fluctuations, yet its underlying source remains difficult to identify. This paper studies strategic sources of asymmetric price adjustment to cost changes, arising from inherent asymmetries in firms' strategies and beliefs. I analyze prices and firm-level bidding decisions in a unique empirical setting in the wholesale electricity market, where previously proposed explanations for asymmetry can be ruled out, using a research design suited for testing asymmetry. I find that prices adjust more incompletely to cost decreases than to increases, with firms' underlying bidding strategies also exhibiting asymmetry. Structural estimation of firms' beliefs about competitors' strategies further reveals that beliefs differ systematically by cost-change direction, with greater dispersion following cost decreases, contributing to incomplete downward price adjustment.

Renewable Portfolio Standards, Vertical Structure, and Investment [paper] (with Mario Samano), under revision

Abstract: Policy effectiveness within industries depends on market structures. We provide evidence of this by examining how vertical structure influences renewable capacity investments under Renewable Portfolio Standards (RPS). RPS links the upstream and downstream electricity sectors by mandating downstream firms to procure a fraction of sales from renewables. Considering various channels through which downstream firms can source investment to comply, we show that RPS-driven investments vary across states with different degrees of vertical integration in their electricity sector. We find lower investments in more vertically separated states, suggesting a misalignment between market structure and policy. 

Capacity Investment Incentives in the Presence of Renewable Energy

Renewable Energy Investment and (In)equal Air Quality Improvement (with Zichen Deng)

(old working paper) Re-Examining the Conditions of Cost Efficiency for Hospital Consolidations: Why a Second Opinion May Be Necessary (draft available upon request)

Teaching

University of Connecticut 

Econ 3461 : Organization of Industry

Econ 3495 (Special Topics): Energy Economics