Job Market Paper
The Effects of Entry in Vertically Integrated Markets: Evidence from the Chilean Telecom Market (with Vicente Lagos)
We explore the strategic relations between integrated incumbents and a new entrant in the Chilean telecom market. Upon entering the market, the entrant relied on network access contracts to provide sufficient quality to consumers. The entrant's agressive pricing strategy dramatically affected the established firms. Following the literature on access pricing, we study how asymmetric cannibalization affects incentives to provide access. We further investigate how providing access to the entrant affects an incumbent's pricing strategy in the downstream market. We use an empirical oligopoly model to rationalize the intensified competition in the upstream market and a sudden decrease in retail prices that resulted from a change in access supplier.
Working papers
Product Differentiation with Bundles of Characteristics and Multipurchasing (October 2024, under review)
We study firms' incentives to differentiate in one-sided and two-sided contexts. We propose a location model where firms offer bundles of characteristics and consumers can purchase more than one product or service (multipurchasing). An increase in differentiation leads to a reduction in the overlap between the characteristics offered by the two firms, which induces more consumers to purchase both products. In a one-sided environment, firms focus on the total size of the demand, whereas firms that operate in a two-sided environment also care about the composition of the demand (i.e., single-purchasers and multipurchasers). We show that maximum product differentiation arises in one-sided environments despite the absence of strategic interactions between firms' prices. In multisided environments, this result may be reversed when the value attributed to single-purchasers by the other side of the market is substantially larger than the value attributed to multipurchasers. We also derive results for the effect of mergers on product differentiation.
Information Retention and Optimal Disclosure Policy (June 2023)
An adviser wishes to persuade a decision maker to undertake a certain action. The adviser is endowed with several pieces of information that jointly determine the decision maker’s payoff, and decides on the amount and content of information to disclose. We explore the merit of stricter disclosure rules when communication is costly for the adviser and this cost is private information. More specifically, we study whether the decision maker would benefit from imposing more information disclosure. We show that the benefit of such a rule hinges on the alignment of the parties’ interests and the quality of the adviser’s information. We also explore the adviser’s incentives to acquire a more precise signal and show how a more demanding disclosure policy affects those incentives.
Work in progress
Optimal Compensation Design for Efficient Allocation of Drivers over Space: Evidence from the leading Carpooling Platform BlaBlaCar (joint with Nicolas Astier and Xavier Lambin)
This paper studies optimal incentive design in ride-sharing platforms using data from BlaBlaCar, one of the world's leading carpooling platform. Analyzing Blablacar's "Smartstops" feature, which allows drivers to make detours for additional passengers, we develop and estimate a structural model of drivers' decision-making that incorporates their dynamic expectations about future bookings and opportunity costs. Our analysis shows that drivers make sophisticated trade-offs between immediate detour compensation and expected future earnings. Counterfactual simulations demonstrate that opportunity cost-based pricing substantially improves driver acceptance rates compared to standard pricing schemes, suggesting important implications for platform design in two-sided markets.