Working Papers
Optimal Transmission Regulation in Restructured Electricity Markets (Job Market Paper)
Abstract: Restructured electricity markets are a recent policy innovation to separate wholesale and retail functions from traditional electric utility firms, leaving only the transmission functions regulated. A regulator's choice in transmission pricing policy affects the entire wholesale market that relies on transmission firms for fulfillment. In this paper I quantify the welfare effects and economic distortions in the Texas restructured electricity market under current, first-best, and second best transmission pricing policies. I find that 87% reduction of dead weight loss could be attained under a second-best Ramsey-Boiteux type pricing policy.
Next Steps: I've not been satisfied with the estimation of behavioral parameters in the current draft of this paper, especially the blatant ignoring of nonstationarity of the data. The next step on this paper is to apply modern time series methods in the behavioral parameter estimation.
Work in Progress
Effect of Regulated Transmission Rates on Firm Real-time Bidding Behavior: Evidence from the Texas Electricity Market
Abstract: Within the US, wholesale electricity in restructured electricity markets is sold in multi-unit auctions. Much recent work in the analysis of strategic generator firm behavior focuses on estimating market power firm bids with heterogeneous capacity and production inputs. The impact of electricity transmission regulation, which affects demand akin to an excise tax, has largely been ignored in the literature. However, exogenous changes in transmission pricing impact demand---this implies that previous firm behavior estimates that ignore this institution may be biased or inconsistent. In this project I analyze the impact of transmission regulation on strategic behavior of generator firms.
Next Steps: The model is well complete on this paper. I found issues in the data I had originally collected for this project, and so it is on hold indefinitely.
Dynamic Platform Investment in Two-Sided Markets: The Impact of Network Neutrality (Second Year Paper)
Draft 1 (good technical reference for other's projects)
Code and Results
Abstract: Since 2006, content providers and Internet service providers have struggled between business and political spheres over the concept and implementation of network neutrality. This paper investigates the claim that network neutrality stifles platform innovation by looking long-run platform investment incentives and at long run two-sided market dynamics between platforms, content providers, and content consumers under network neutrality and non-neutrality regimes.\
Next Steps: As a paper this has served primarily as an exercise to marry the Ericson-Pakes algorithm with two-sided markets, which is a badly needed next step for two-sided market simulation (e.g. ebook pricing). The unfortunate issue in the current form of the paper is lack of data. The paper uses engineering estimates from internet service provider engineering reports that may be inaccurate. Draft 1 as a computational exercise is fairly complete; a more complete draft may be found as a chapter in my dissertation.
Topics
Regulatory impact to firm productivity
Electricity markets
Platform markets
"Big Data" applications in economics
Current Projects
Welfare Analysis of Restructured Electricity Markets
Effect of Transmission Rate Policy on Firm Behavior