Understanding fighting brand strategies Johnson and Myatt (2003) developed a model of competition where firms can offer products that vary in quality. They showed that an incumbent monopoly active in a high-quality segment may have an incentive to launch a product in a low-quality segment only after new entry in that segment, and not before. […]
Organisation of Markets
We focus on research that concerns antitrust policy, economic regulation, and market design. Questions of interest include the following:
How should we regulate horizontal and/or vertical mergers? Is there a trade-off between short run market power and longer run investment incentives?
How should we respond to departures from the competitive ideal in markets; with imperfect information, that are highly concentrated, that are natural monopolies, or that generate externalities resulting from knowledge producing activities?
How should centralized markets (like health insurance exchanges, kidney exchanges, and school choice mechanisms) be organized?
What is the optimal design of auctions to procure services for the government, such as highway construction contracts, or to sell government assets, such as spectrum or mineral rights?
How can policy makers detect and deter collusion?
How should patent policy be designed?
The Long-Run Impact of Immigration on Local and Aggregate Productivity
Can increases in the size of the population raise productivity? There are ample theoretical reasons to believe that the answer to this question ought to be yes. Most theories of growth predict a positive relationship between innovation incentives and market size, and many models of international trade or development economics highlight the importance of agglomeration […]
Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange
The Affordable Care Act is one of the most significant health reforms in a generation. In addition to covering 15 million uninsured Americans, substantially expanding government health spending, and setting off a fierce political debate, the ACA is notable for an underappreciated reason: it is a major expansion of market-based health insurance. Traditionally, health insurance […]
What happens when foreign firms expand local employment?
Data and Statistical Patterns The new study is the first to construct a panel data set linking all firms and workers in the U.S. with foreign ownership information on firms. To do so, we developed a worker-firm panel from the population of annual U.S. Treasury tax filings from 1999 to 2017. For each worker-firm-year combination, […]
Should There Be Vertical Choice in Health Insurance Markets?
Are consumers on ACA exchanges actually made better off by having a choice between a high-deductible and a low-deductible health plan? Would U.K. citizens be better off if they could opt into accepting a deductible, in exchange for an up-front payment? The research summarized here introduces a framework for exploring such questions theoretically and empirically. […]
Research lessons for practical school choice policy
Many cities use centralized school choice systems to assign students to schools. In centralized choice, students submit ranked lists of schools to a centralized authority. The authority then uses some combination of priorities (e.g., test scores or neighborhoods) and random tiebreakers to place each student in at most one school. Centralized choice systems help alleviate […]
The long-term benefits of better school lunches
Although school meal programs have been around since the 1940s in countries such as Finland, Sweden, the UK, and the US, they have been difficult to evaluate. The US school lunch program, for instance, is federal: hence there is little variation across areas, and quasi-experimental approaches to measuring the effects are not easily applied (Hoynes […]
Innovation matters because it drives economic growth, increases profits, and can often make consumers better off. Innovating firms are sometimes taken over by incumbents, typically while the innovating firm remains in the early stages of product development. Economists have traditionally viewed these deals quite positively as a routine part of overall growth. Established firms which […]
Taxation and Innovation in the Twentieth Century
How sensitive are inventors to changes in tax rates? This is a critical and controversial question in public policy given the centrality of the tax system to the structure of incentives in the real economy. While targeted tax policies, such as R&D tax credits, can spur innovation, our work focuses on whether general personal and […]
How Should R&D Procurement Be Structured?
Many buyers, such as firms and government agencies, acquire products that are not commercially available — from customized parts for automobiles or airplanes to major weapons systems with novel capabilities. Suppliers who want to compete for these procurement contracts must engage in costly R&D to design and develop the relevant products. Accordingly, the potential suppliers […]