Embedded Files
Journal Articles
"Implicit trade-off in replacement rates: Consumer preferences for firms, intermediaries, and annuity attributes", International Journal of Industrial Organization, Vol. 82, May 2022, 102827, joint with Bernardita Vial.
An annuity is an insurance policy designed to protect the annuitant from longevity risk. However, retirees are willing to reduce annuity payments by choosing guaranteed periods or firms with better risk ratings, suggesting they are also concerned with the provider’s default risk and the risk of bequeathing their heirs if they die early. We use a hedonic price model to estimate the demand for retirement products and the expected cost of providing annuities for companies. Then, we analyze market outcomes under different counterfactual scenarios. We show that forcing retirees to select quotes that maximize payments could affect the pension system in other dimensions beyond replacement rates. We find that firms have low margins and increase their payouts only slightly under the restricted scenarios. The annuity share decreases, and replacement rates increase, but the restrictions lower consumer utility. They also generate a substantial deterioration in the rating distribution of selected firms.
"Why does Peer Instruction improve Student Satisfaction more than Student Performance? A Randomized Experiment", International Review of Economics Education, Vol. 30, January 2019, 100149, joint with Juan Nagel.
Studies consistently show that active learning improves student satisfaction, but results on achievement are less conclusive. We address this puzzle by comparing an active learning classroom that employs peer instruction with a traditional lecture using an experimental design in a Chilean Economics and Business school. Students in the treatment group are more satisfied with the course and have better grades, but the treatment effect varies as the semester progresses: small at the beginning, larger in the middle, and nonexistent in the final exam. Our hypothesis is that the treatment changed student effort. Students performed better under peer instruction and may have decided to decrease their effort toward the end of the semester. We present evidence consistent with this hypothesis. Additionally, students in the treatment group perceived that the most important part of the treatment was the greater interaction with the professor, and they reported studying less with their peers outside of class.
Working Papers
Alcalde, P. and B. Vial (2021), "Intermediary Commissions and price competition in a Regulated Market with Heterogeneous Customers", working paper
Besides its effect on customers’ choices, trust in the intermediaries’ expertise also affects firms’ market power and equilibrium prices. Customers who base their decisions on intermediaries’ recommendations are less sensitive to price changes. Our model shows that prices may move in the opposite direction to the intermediaries’ bias. When intermediaries are cheaper and less biased, more customers follow their advice, making demand less elastic. This change induces firms to increase prices, producing nontrivial effects on welfare. Evidence from a policy reform in Chile’s retirement market is broadly consistent with these predictions and suggests that demands respond to commission changes.
Notes
Alcalde, P. (2014), "Simplification for a Special Case of the Cholesky Decomposition", note.
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