This new working paper (July 2023) considers markets where both the seller and buyers may not know the quality of the asset and each market participant does not know whether other market participants know. the paper shows that this may lead to situations where the asset is not traded even if market participants are symmetrically informed.
This paper shows that word-of-mouth communication can prevent the well-known Diamond paradox to arise in a sequential search model. Consumers that do not search themselves may get informed about more prices and buy at the lowest price. The paper is now accepted for publication at International Economic Review.
This paper studies competitive markets where consumers have to inspect products to see whether they like them. It shows how firms strategically choose their product return strategy to induce consumers to buy their product before inspecting it. It asks whether from an efficiency point of view the market creates too many or too few products returns. The paper is now accepted for publication at American Economic Journal: Micro.
Incumbency Advantages: Price Dispersion, Price Discrimination and Consumer Search at Online Platforms
The paper studies how consumer search affects pricing when consumers observe the baseline price
of their current provider and decide whether or not to search for an alternative tariff at an online platform.
The paper is now published in the August 2023 issue of Journal of Political Economy: Micro.
This paper shows that in consumer search markets discriminatory trade promotions create more profits for manufacturers than uniform pricing. The paper is now published in the 2023 spring issue of Marketing Science.
The paper shows that in search markets an influencer who recommends a product to her followers improves consumer surplus and total welfare despite the firm paying for her recommendation.
The paper is now accepted for publication at Rand Journal of Economics.
New June 2022: We analyze markets, such as those for airline tickets and hotel accommodations, where firms sell time-dated products and have private information about unsold capacities. We show that firms have less market power as under complete information. The paper is now accepted for publication at Management Science.