Bruno Pellegrino

I am a Ph.D. Candidate at the University of California Los Angeles (Anderson School). I do research at the intersection of Macroeconomics, Finance and Applied Microeconomics. I am on the market and will be available for interviews at the following conferences:

  • AEA/AFA meetings - San Diego (3-5 January, 2020)
  • EEA Job Market - Rotterdam (17-19 December, 2019)

bpellegrino@ucla.edu

+1 (312) 257-8888

Job Market Paper

Abstract: Both industry concentration and profit rates have increased significantly in the United States over the past two decades. There is growing concern that oligopolies are coming to dominate the American economy. I investigate the welfare implications of the consolidation in US industries, introducing a general equilibrium model with oligopolistic competition, differentiated products, and hedonic demand. I take the model to the data for every year between 1997 and 2017, using a dataset of bilateral measures of product similarity that covers all publicly-traded firms in the United States. The model yields a new metric of concentration – based on network centrality – that varies by firm. This measure strongly predicts markups, even after narrow industry controls are applied. I estimate that oligopolistic behavior causes a deadweight loss of about 13% of the surplus produced by publicly traded corporations. This loss has increased by over one third since 1997, and so has the share of surplus that accrues to producers. I also show that these trends can be accounted for by the secular decline of IPOs and the dramatic rise in the number of takeovers of venture capital-backed startups. My findings provide empirical support for the hypothesis that increased consolidation in US industries, particularly in innovative sectors, has resulted in sizable welfare losses to the consumer.

Press Coverage: [Pro-Market @Stigler Center]

Figure 3 of my Job Market Paper:

a network representation of the US economy in 2004, created by applying a gravity-directed layout algorithm to the dataset of Hoberg and Phillips (2016)

Each dot is a company, and distances/links reflect product similarity (intensity of competition)