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.

Working Papers and Projects

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

Abstract: Clean energy transition is reshaping the power sector to rely more on energy that is subject to input cost volatility. I study the competitive effects of the transition from coal to gas, using gas as an energy source with volatile marginal costs of generation. Using counterfactual analysis, I show that the volatile nature of cleaner gas generation creates an environment that raises concerns about an increase in the electricity-generating firms' market power following the transition. However, such adverse effects are largely mitigated under a well-planned investment of new gas generation leading to a more competitive industry structure following the transition.

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

Abstract: The efficacy of policies imposed on industries or firms largely depends on the market structure. We illustrate this impact by examining how Renewable Portfolio Standards (RPS) influence investment decisions. The RPS requires the in-state downstream electricity providers to procure a minimum percentage of their electricity sales from renewable generation upstream. The goal of the policy is to incentivize the upstream sector to invest in renewable generation capacity. We examine how the effectiveness of the RPS policy in inducing renewable investments upstream differs by the nature of the vertical structure of the electricity market, exploring the heterogeneity in vertical structures (relations) across states. We find that the overall investments that comply with the policy are lower in the states characterized as vertically separated. This suggests that there is a misalignment between regulation design and market structure. 

Strategic Uncertainty and Firm Competition

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)