Research
Working Paper
Posting Frequency and Pricing in an Online Platform (JMP)
This paper examines how advertising affects equilibrium prices in an online marketplace by using unique data from a Korean online resale market. The posting frequency in the used market is used as a measure for advertising. Using the posted price, I infer how sellers compete in price using the empirical implications of the Armstrong and Vickers (2020) framework of oligopolistic firms. The analysis shows that sellers with more frequent listing charge prices with first-order stochastically dominant distributions than sellers who advertise less. Sellers who post less face more elastic demand than the frequent posters, resulting in higher markups for the frequent posters. Repeated posting benefits frequent posters and platforms by increasing the market price and chances of sales but can harm consumer welfare.
Holding the Best and Worst Hand: A Two-Sided Matching Approach to Seller-Intermediary Relationships (with Darcy Fudge Kamal, Madhu Viswanathan)
Presented at Strategic Management Society Conference (2020) (Nominated for Best Research Methods Prize) , Academy of Management annual meeting (2021)
We study the interplay between partner selection, firm resources, and resource concentration in the Thoroughbred horse industry, focusing on seller-intermediary relationships and a given portfolio of products. Theory predicts that partners are more likely to be selected for high-quality resources. However, when an upstream partner has multiple goods to allocate, the focal partner may bundle high-quality resources with low-quality resources. We analyze this problem using a dataset of breeder-consignment relationships formed from 2005 to 2008 to sell horses. Our modeling approach incorporates the selection of partner decisions, allowing us to account for the diversity of goods for each side and recover the cost of transactions. Our results indicate that differences in resource portfolios result in an increased concentration of business with intermediaries.
Distributed ESS Capacity Decision for Home Appliances in Smart Home (With Ye Gu Kang)
Presented at IEEE-ECCE conference (2020)
Increasing penetration of renewable energy makes electricity system operators adopt time-varying electricity prices to balance supply and demand mismatch. An energy storage system(ESS) is an effective but expensive solution to reduce price volatility risk. We propose a distributed ESS individually installed in each home appliance to avoid sizeable initial investment costs while optimizing financial benefits to the homeowner. The profit from the electricity price difference, optimal battery capacity, and charging/discharging decisions are calculated based on the home appliance power consumption and time-varying electricity price profile. Finally, distributed ESS is compared to central ESS from the perspective of the homeowner.
An Equilibrium Analysis of Power Purchase Agreement (With Gaurav Doshi)
Power Purchase Agreements (PPAs) are widely used long-term contracts to purchase electricity from renewable sources at a fixed price over long periods. This paper investigates the link between the risks associated with renewable power generation - specifically risks due to wholesale electricity price and project capacity. We examine a buyer’s and seller’s choice to participate in the PPA market using a stylized model. The equilibrium price is modeled as a function of wholesale market price and contracted quantity. Using the data on all utility-scale wind projects in the US, we test the predictions from the theoretical model in the empirical analysis of this paper. We show that the mean retail and wholesale electricity market price has a positive association with PPA prices whereas wholesale price volatility has a negative association with PPA prices. The sensitivity of the PPA prices is dependent on the participation decision of the buyers and sellers of electricity. Therefore, regulators should consider the potential impacts of government policy on barriers to entry and length of contracts on PPA prices and therefore the financial returns of the renewable energy generators.
Work in Progress
Does Transmission Expansion lead to over-investment in Wind Energy? Evidence from Texas (with Gaurav Doshi)
Secondary Market and New Release
Presented at Academy of Marketing Science annual conference(2021), INFORMS Marketing Science conference (2021)
This paper investigates the monopolistic manufacturer’s investment and new product release decisions when used products are traded in the secondary market. By building a theoretical model that can capture consumers’ choices and the linkage between the primary and secondary markets, I quantified the effect of friction level and the technological advantage in the secondary market on the market equilibrium. I find the positive relationship between the increase in the secondary market trade and the decreasing gap between the new releases based on empirical analysis. The result suggests that manufacturers would intend to intervene in the secondary market by increasing frictions and the investment, release decisions are also susceptible to the technological gap compared to the previous model.
Pre-Doctoral Research
Can Prosocial Behaviors Be Nurtured? Experimental Evidence from the Scholarship Program Reform by Korea University (with Seung-Gyu (Andrew) Sim, Sung Jin Kang, Yasuyuki Sawada )
Impact of the Exclusive Median Bus Lane System on Air Pollution Concentrations in Seoul, Korea (Journal of Korean Society for Atmospheric Environment) (Published in Korean)