Afonso Rodrigues - Research

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Working papers

Aggregate linear demand systems can be micro-founded by a population of heterogeneous consumers making discrete choices. They can also be extended to incorporate income effects. I prove these results and show how to structurally estimate this class of models using only market-level data. The distribution of consumer preferences is recovered by disciplining the corner solutions with aggregate terms only. This approach allows for the same richness of Berry, Levinsohn, and Pakes (1995) [BLP] while retaining the analytical and computational advantages of linear demand: it does not require exogenously fixing market size, allows for heterogeneity in choice sets, and results in a flexible substitution matrix which varies endogenously as different consumers enter/exit the market. The discrete-choice microfoundation facilitates welfare analysis and the flexible measurement of markups an cost pass-throughs, among a wide range of other applications.

This paper introduces a novel characteristics-based specification for linear demand to investigate endogenous product design. Characteristics are allowed to affect both consumers' product valuations and to what extent these compete. I demonstrate how such a specification can help linear demand deliver fresh insights in how firms may optimally design existing goods, as well as predict demand for new products. The framework is novel in its broad applicability to settings with any finite number of goods, firms, and product characteristics, with both vertical and horizontal differentiation across different market structures, and under asymmetry.

I introduce a novel approach to modelling and estimating continuous demand systems, utilising consideration sets to analyse differentiated products markets with very large choice sets, and where purchases over multiple goods, multiple units, and across product categories are common. I apply this approach to study intra-store competition in the Portuguese supermarket industry between 2020 and 2023. Anonymised transaction-level point-of-sale data is sufficient to estimate price elasticities across almost 30 000 goods and more than 500 product categories. The implied markups match observed price volatility, profit margin surveys, as well as reports on shifting consumer tastes during the sample period.

Lisbon Meetings in Game Theory and Applications, June 2025 - Best Graduate Paper 🎉

How does the entry of a generic variety onto an industry change competitive outcomes, when said industry is composed of firms of distinct sizes? Conventional wisdom in competition policy perceives generics primarily as purveyors of increased market competition and consumer welfare gains. I analyse this question and consider the merits of the prevailing view using a product differentiation model, simultaneously integrating the standard settings of Cournot oligopolistic and Chamberlinian monopolistic competition, facing a new challenge from a perfectly competitive generic variety. I find generics entry to have an ambiguous impact along most dimensions of interest to producers and consumers; significant asymmetric and interacting effects based on firm size heterogeneity; consumer welfare opacity from observable market outcomes; and multiple channels for utility effects, both negative and positive. These results have relevant regulatory implications, suggesting a movement from policies aimed at lowering fixed generics entry costs to more active and granular strategies engaging with the consumer preferences, firm types, and product interactions within each targeted industry.

Research

Working papers

Work in progress