Works in Progress

Differential Industry Risk, Institutional Policies, and Longevity

(with Rachel Grashow, Wayne Grove, and Marc Weisskopf)

Abstract:

Forthcoming...

Superbosses: How Do Leaders Influence Assistants' Managerial Careers

(with Wayne Grove)

Abstract:

Forthcoming...

Screening Mechanisms and Worker Productivity

(with Wayne Grove)

Abstract:

Forthcoming...

Competitive Balance in Panel Data

Abstract:

Current analysis of season-level competitive balance in sports leagues typically rely upon measures of dispersion that aggregate team-level outcomes to a league-level for a particular or multiple seasons. The econometric analysis of particular policy changers therefore relies upon time series data which may be limited by the number of available observations. For instance, suppose an individual is interested in exploring the impact of maximum player salaries in the NBA, implemented with the 1999 CBA, upon competitive balance. Aggregate, season-level measures of competitive balance, such as the actual standard deviation of win percentages, relative standard deviation of win percentages, or Gini or HHI would be limited by potentially confounding policy changes included in the 1995 or 2005 CBAs. Estimations on the resulting number of observations may be underpowered for anything but the largest effect sizes. In addition to exploring the power of existing measures of competitive balance, I propose a new measure, the absolute value of the z-score of win percentages, that is consistent with panel data. In addition to increasing the available power allowing for the detection of smaller effect sizes, the panel data compatible measure also permits for the examination of differential impacts of policy by team characteristics. For example, the recent addition of a "supermax" salary level in the NBA was designed to allow "small market" franchises to offer larger contracts to superstar players with the apparent motivation to increase retention and, potentially, improve competitive balance. The measure of competitive balance consistent with panel data would permit the examination of whether the addition of supermax contracts decreased the dispersion of outcomes across teams controlling for both team and season fixed effects.

Endogenous Strategic Alliances: R&D Investment, Licensing, and Research Joint Ventures

Abstract:

Complementing Anderson’s (2019) theoretical model of heterogeneous firms under endogenous fixed costs associated with entry, I assume an explicit functional form for consumer utility and numerically simulate the set of feasible equilibrium configurations over product quality and market entry allowing for asymmetric R&D costs across firms and strategic alliances. Under a quality-indexed linear demand utility function and in the absence of strategic alliances between firms, I first derive the four feasible cases for equilibrium configurations consisting of quality choice and market entry for a set of heterogeneous firms under endogenous fixed costs. I then restrict the number of low-cost firms such that there is a single, market leader with a “first mover” advantage in quality choice and determine the feasibility of entry deterrence or accommodation by the innovating firm. Subsequently, I incorporate licensing and research joint ventures into the single low-cost firm model and examine the incentives of the innovator to “choose” its competitors by setting both the number of license agreements and the level of technology or "choose" its collaborator under uncertain R&D investment. Numerical simulations confirm that for the general case with asymmetric R&D costs, markets will become more concentrated when R&D by high-cost firms is more effective or if products are close substitutes.