The Impact of Cannabis Tourism on the Airbnb Industry with Minsek Ko and David Bojanic (Forthcoming in Tourism Economics)

Abstract:  Despite the growing importance of the sharing economy and cannabis tourism, no research has examined their intersection. This study examines how recreational marijuana legalization affects the hospitality sector of the sharing economy (e.g., Airbnb). We introduce the concept of localized cannabis tourism—the experiential value created when legal cannabis access is spatially concentrated alongside cannabis-friendly accommodations and services—as a potential mechanism linking legalization to lodging demand. Using panel data from Denver, Colorado (October 2014–August 2022), we analyze how the presence of recreational marijuana stores influences Airbnb performance, including revenue, rental price, reservation days, and listings. Results show that a 20% increase in store numbers is associated with a 2.24% rise in average revenue, a 1.24% increase in reservation days, and a 4.28% growth in listings. Findings suggest that localized cannabis tourism stimulates participation in the sharing economy, highlighting the role of public policy in shaping economic opportunities in tourism and hospitality.

Rent Seeking and Dissipation in Contests with General Power Functions

Abstract:  This paper investigates the property of mixed strategy Nash equilibrium of Tullock Contest (Tullock 1980) with a more general class of cost function. As a preliminary result, the formal proof for the existence of the equilibrium is established for the case where the cost function is c(x)=x^k such that k>1, extending Alcalde and Dahm (2010) with c(x)=x.

Product Purchasing Contest under Incomplete Information

Link:   Draft 

Abstract: This paper examines product purchasing contests, where firms incentivize product purchases by leveraging exclusive rewards through competitive mechanisms. I analyze the relative performance of winner-pay and all-pay auctions in this setting, where the contest designer has incomplete information about consumers’ valuations of the rewards. Unlike conventional contests that use monetary bids, product purchasing contests require participants to submit their purchase quantities of regular goods as bids. This fundamental difference introduces two distinct effects: regular goods generate utility while incurring production costs, and firms can control the contest structure by adjusting product prices. I demonstrate that all-pay auctions outperform winner-pay auctions in both firm profits and total welfare, diverging from the classic Revenue Equivalence Theorem (Myerson, 1981). This dominance stems from the interplay between consumers’ diminishing marginal utility from regular good consumption and firms’ linear production costs, which makes dispersed consumption under all-pay auctions more efficient than concentrated consumption under winner-pay auctions. These findings suggest that concerns about wasteful competition in all-pay formats should be weighed against their superior economic performance. 

The First Spark: Early-Bird Incentives to Ignite Social Spillovers in the Movie Industry

Abstract: I investigate the antitrust implications of contests as a strategic tool for firms in markets with incomplete information, such as those for experience goods. In these markets, consumers often rely on sales rankings or star ratings to assess product quality. This reliance may incentivize firms to induce excessive initial purchases through contests, in order to influence subsequent consumer decisions and trigger a bandwagon effect. Additionally, the fixed costs associated with contests provide larger firms with a competitive advantage, potentially raising concerns about market concentration and entry barriers. This issue can also be examined through the design of information channels, as they play a crucial role in shaping consumer behavior and market outcomes. Furthermore, I am working on an empirical project focusing on the movie industry, where word-of-mouth effects play a crucial role in determining box office revenues. By combining movie performance datasets with web-scraped data on promotional early-bird merchandising contests, I aim to quantify how these contest strategies dynamically influence consumer behavior through social learning channels, and thus market outcomes. My panel dataset comprises 494,007 observations tracking individual movies over their theatrical runs, accounting for 99.53% of total box office revenue during the study period. This research contributes to both theoretical and empirical Industrial Organization, while providing insights for antitrust policy.