Awarded finalist for the MinE Best Paper Award

Does competition always mitigate the impact of discrimination on racial wage gaps? This paper examines the impact of product market competition on customer-driven taste-based discrimination in a service economy characterized by homophily. I develop a novel equilibrium model of both product and labor markets in which heightened product market competition tends to exacerbate labor market discrimination in customer-facing occupations. Intensified competition compels firms to reduce prices while also prioritizing the preferences of wealthier demographic groups when the service product is a normal good. This results in widening wage and employment gaps between the privileged demographic groups and others in the service sector. I validate the predictions of the model in the context of intensified competition in the US banking sector, triggered by bank deregulation. I find that wage and employment gaps between Black and White workers in the banking sector widened post-deregulation precisely in client-facing occupations and in states with higher levels of racial animosity.



I study how insurers assess risk, set premiums, and determine coverage in unregulated selection markets. The analysis draws on unique granular administrative panel data from one of Israel’s largest commercial auto insurers, directly observing internal pricing and coverage decisions. I document that pricing and coverage patterns in this market deviate from standard cost-based benchmarks. Surprisingly, premiums respond weakly to expected costs, while coverage denials are frequent and sensitive to expected costs. Using a theoretical and structural analysis, I show that these patterns, often attributed to adverse selection, are instead driven by market power, fixed costs, and the insurers' overweighting of noisy risk signals. Market power and supply-side frictions distort insurance provision, disproportionately harming high-cost, small clients with volatile risk profiles.




This paper studies the difference between insuring a quality uncertain good and a monetary loss. I integrate key insights from the pre-owned market into the analysis of the demand for insurance. I find that adverse selection in the resale market results in a missing insurance market. There’s a gap between the insured vehicle and the resale market’s quality, especially for new vehicles. As a result, clients over-insure their quality uncertain goods, yet demand drops over the vehicle life cycle. The partial compensation further amplifies over-insurance patterns driven by behavioral attributes. The gap results in time-trends; As the vehicle ages, demand drops, the insurance market is more adversely selected, and moral hazard increases. The incomplete compensation can explain why the demand for insurance is context-dependent, why customers over-insure limited risk, in general, and why they over-insure durable goods, in particular.