José L. Moraga

Welcome to my homepage! 

I am Professor of Microeconomics at the Department of Economics of the Vrije Universiteit Amsterdam. Currently I am also visiting professor at Télécom Paris.

I am also fellow of Tinbergen Institute, CEPR, CESifo, and the Private-Public Sector Research Center (PPSRC) of the IESE Business School.

Please follow these pages to find more about my research or visit my google scholar page.

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An entrant and an incumbent engage in an investment portfolio problem and allocate their research funds across a rival market, where they compete with one another, and a non-rival market. The prospect of an acquisition distorts both players’ incentives to invest. We show that allowing for acquisitions may improve the direction of innovation of each of the players as well as consumer surplus. Because precisely the shift of resources towards and away from non-rival projects causes the welfare gains and losses, using the traditional "definition-of-the-market" approach to assess the impact of acquisitions should be reconsidered.

This paper studies how selling constraints, which refer to the inability of firms to attend to all the buyers who want to inspect their products, affect the equilibrium price and social welfare. We show that the price that maximizes social welfare is greater than the marginal cost. This is because with selling constraints, a higher price, despite reducing the probability of trade (fewer buyers are willing to pay a higher price) increases the value of trade (only trades generating positive surplus are consummated). We show that the equilibrium price is inefficiently high except in the limit when firms’ selling constraints vanish and consumers observe prices before they visit firms. Thus, selling constraints constitute a source of market power.

A start-up engages in an investment portfolio problem by choosing how much to invest in a “non-rival” project and in a “rival” project that threatens an incumbent. Anticipating its acquisition, the start-up distorts its investment portfolio in order to raise acquisition rents. This may improve or worsen the direction of innovation and consumer surplus. The bigger the difference in social surplus appropriability across the two projects, the more likely it is that the direction of innovation improves and consumers benefit from an acquisition. These results also hold if the acquirer takes over the research facilities of the start-up. (Slides)

(For the long version of the paper with additional extensions see our SSRN Working Paper November 2022.) 

This paper develops a discrete choice model of demand with optimal sequential consumer search. Consumers first choose a product to search; then, once they learn the utility they get from the searched product, they choose whether to buy it or to keep searching. We characterize the search problem as a standard discrete choice problem and propose a parametric search cost distribution that generates closed- form expressions for the probability of purchasing a product. We propose a method to estimate the model that supplements aggregate product data with individual-specific data which allows for the separate identification of search costs and preferences. We estimate the model using data from the automobile industry and find that search costs have non-trivial implications for elasticities and markups. We study the effects of exclusive dealing regulation and find that firms benefit at the expense of consumers, who face higher search costs and higher prices than would be the case if multi-brand dealerships were used.

This paper carries out a positive and normative analysis of the provision of quality in a consumer search market for differentiated products. More quality makes consumers pickier. But do they check more products before settling for one of them? If they do, firms over-invest in quality from the point of view of social welfare maximization; if they don't, firms under-invest in quality.


This paper studies mergers in markets where firms invest in a portfolio of research projects of different profitability and social value. The investment of a firm in one project imposes both a negative business-stealing and a positive business-giving externality on the rival firms. We show that when the project that is relatively more profitable for the firms appropriates a larger (smaller) fraction of the social surplus, a merger increases (decreases) consumer welfare by reducing investment in the most profitable project and increasing investment in the alternative project. The innovation portfolio effects of mergers may dominate the usual market power effects.  

For the long version of the paper containing additional details and extended proofs, click here.

We extend the literature on simultaneous search by allowing for differentiated products and search cost heterogeneity. We show conditions under which a symmetric price equilibrium exists and provide a necessary and sufficient condition under which an increase in search costs may result in a lower, equal, or higher equilibrium price. The effects of prominence on equilibrium prices are also studied. The prominent firm charges a higher price than the non-prominent firm and both their prices are below the symmetric equilibrium price. Hence, market prominence increases consumer surplus.