This paper offers a theoretical framework associating subcontractor networks in procurement auctions to affiliated private costs of potential bidders. A model to test this hypothesis is constructed as an extension of the methodology developed by Li and Zhang (2010) to allow for variable affiliation depending upon firm-pair observables. The extension is used to test for entry affiliation caused by subcontractor networks, in a sample of Oklahoma Bridge building contracts from 2004 to 2011. The empirical analysis finds a statistically significant presence of affiliation, driven by networks of subcontracting, in firms' decision to bid for projects.

More than twenty years have passed since some states acted to restructure intra-state electricity markets, opening these former monopoly markets to competition. A number of studies have subsequently examined such restructurings, yet two key characteristics of the extant research create the opportunity to provide fresh insights into the evolution of these markets. First, research to date almost exclusively focuses on how restructuring affects electricity costs and prices. At a more primitive level, however, any economic impact of restructuring is driven by the willingness of new suppliers to enter formerly monopoly markets and by the propensity of consumers to switch away from their historical monopoly provider. Second, existing research largely focuses on restructuring as a discrete phenomenon: it either happened or did not happen. The restructuring of intra-state electricity markets was, however, considerably more nuanced, both in initial legislative design and in regulatory implementation, than implied by the prevailing discrete categorization.  In this paper, we examine both the role played by these more basic drivers of restructuring outcomes, and delve into the potential for variations in state-level legislative design and ex post implementation to profoundly affect the evolution of restructured electricity markets. Our empirical analysis provides considerable support for not only the crucial interplay between entry and consumer switching, but also the key role that legislative and regulatory market design mechanisms have had on the evolution of electricity market structure.

Did a 2000 legislatively-mandated increase in the reporting thresholds for proposed mergers lead firms to endogenously undertake mergers that now lie below the threshold, with the aim of avoiding regulatory scrutiny? Recent research finds support for this behavior, dubbing this activity “stealth consolidation.” We extend this exploration in new directions logically implied by the theory. Our empirical findings cast considerable doubt upon the stealth consolidation hypothesis, and suggest that a more broadly consistent explanation for the evolving composition of mergers stems from business cycle influences that occurred around the time of the regulatory change. 

Academic and popular scrutiny of merger challenges and their subsequent outcomes have captured increasing attention in recent years.  Yet, while the FTC and DOJ (Agencies) are tasked with investigating an average of 1,633 (2001-2021) mergers annually, fewer than 40 challenges typically occur in any given year. Thus, the Agencies’ early-stage merger investigations filter out the vast majority of mergers, leaving them unchallenged. In this paper, we shift the traditional focus on end-stage challenges and policy resolution of proposed mergers to the earliest stage of merger enforcement in which the Agencies can choose to assign a proposed merger to a specific antitrust agency for more extensive scrutiny (known as “clearing” the merger to an agency for review). In line with both agency policy communications such as the Horizontal Merger Guidelines and established economic theory, we find that industries with higher levels of horizontal mergers and industry concentration have higher clearance rates, while industries with more competitors and new entrants are less likely to be cleared. Mergers among firms that compete in more geographically narrow markets are more likely to face scrutiny through a heightened likelihood of clearance. Furthermore, we find that industries which have been challenged in the recent past are more likely to be cleared. We also find that other factors not explicitly related to industry competition impact clearance rates, particularly the agencies' funding per merger. We find no indication that the political party in power impacts the likelihood mergers are cleared.

This paper investigates the relationship between a dealer’s network and their ability to survive in the market using a dataset of 19th-century English art transactions. We find that dealers who purchased artworks from central sellers, and thus developed high hub centralities, survived in the market longer compared to their counterparts. This effect persists even when controlling for the quantity of works purchased, suggesting that more than just higher activity was at play. The paper builds upon previous empirical work showing that art dealers use their network connections to obtain less noisy signals about artworks' value, resulting in a competitive edge in the market. The findings have implications beyond the art market, adding to a body of literature that suggests network connections help firms long term sustainability surviving in an uncertain marketplace.

We study the impact of stimulus infrastructure spending on the road construction industry. We find that a decline in private construction during the Great Recession led to a marketable increase in firm participation in the road construction industry. This short-term change in participation translated into longer-term benefits for the survival of firms in this concentrated industry. Infrastructure spending increased market competitiveness even after the funds were expended.

In public procurement, most contracts are renegotiated ex post and involve subcontractors. We examine whether there is a causal link between subcontractor use and the incidence of change orders to amend the original scope of a project. Since subcontracting is likely related to unobserved project complexity, we use a novel IV, the predicted level of subcontracting from a method modeled after Christakis et. al (2010), to estimate the likelihood of renegotiation. The results establish that subcontractors are associated with an increased likelihood of change orders as well as a higher dollar amount renegotiated.

This study aims to identify factors contributing to price fluctuations in artworks after an artist's death. With access to information on seller characteristics from a historical dataset of all art auctions that took place in London between 1741 and 1913, we investigate how trading patterns and network effects affect art sales prices at auctions. Following an artist's death, we capture dynamic effects in sales patterns and find that prices decline by seven percent. We attribute this decline on the confluence of non-strategic and strategic effects, firstly on a frequent lack of access to professional consultation and secondly on changes in trading patterns of art dealers posthumously. Our results highlight the long term influence of those factors on high valued art.