Working Papers
Fewer Buyers, Higher Pay? Monopsony and Product Market Power in the U.S. Publishing Industry (JMP)
Abstract
In 2022 the DOJ blocked a merger between Penguin Random House and Simon & Schuster, two if the five largest publishers worldwide. This became the first merger blocked exclusively based on monopsony power, under the idea that these would significantly reduce compensation to best-seller authors, for which these firms usually compete. I propose a model to investigate this issue, with focus also on non-best-sller authors and consumers. First, I use the previous merger brtween Penguin and Random House to address potential changes generated by this type of mergers. I observe that after that, compensation decreases for best-sellers, however, compensation for debut authors increases. Also, I observe that in the merged firm there is a significant decrease in the number of published debuts, as well as an increase in those debut’s quality, which can respond to portfolio changes. To estimate the effects of the PRH-SS merger I build a structural model of publishing industry, where publishers acquire books’ rights from authors in ascending auctions, based on the expected value they create. Based on these acquistions, publishers then compete in prices downstream and consumers make purchases.
Gender-Based Price Differences: The Case of Deodorants
Abstract
This paper investigates gender-based price disparities in the deodorant market. First, I show that products targeted to women tend to have higher prices than similar products targeting men. Using a structural demand model, I quantify the extent to which price gaps arise from differences in marginal costs, portfolio composition, and consumer price sensitivity. I find that nearly all of the observed price gap is attributable to cost differences, not firms’ pricing strategies. Simulating a counterfactual policy mandating gender price parity, I show that such type of regulation can unintentionally reduce consumer welfare for women and increase profits for dominant firms. These results suggest that gender-parity policies targeting prices, absent cost considerations, may have unintended and uneven consequences across consumers and firms.
Work in Progress
Splitting the Crowd: Network Effects and Welfare Implications of Platform Competition (with Regina Seibel)
Abstract
This paper estimates the magnitude of network effects in highly concentrated digital platform markets and studies their welfare implications in the context of game live-streaming. We focus on competition between Twitch, the dominant platform, and Kick, a recent entrant that gained market share following Twitch’s restrictions. Using daily streamer-level data, we first provide reduced-form evidence that major streamer switches generate positive spillovers for incumbents on the receiving platform and negative effects on the origin platform, consistent with indirect network effects beyond standard taste-for-variety models. We then estimate a structural demand model that augments a discrete-choice framework with a flexible term capturing the value of platform size. We find strong positive network effects, meaning that demand increases with the number of streamers on the platform. These findings suggest that entry in concentrated digital markets can reshape demand through network amplification mechanisms.
Does Top-Level Diversity Trickle Down? Evidence from U.S. Literary Prizes (with Yakov Bart, Samsun Knight, Julianna Spahr and Stephanie Young)
Abstract
Does diversifying prize-winners diversify the market? This idea motivates a large number of high-profile diversity initiatives, but is largely untested empirically. We estimate the effects of literary prizes on readership across author race and ethnicity using library checkout data from the Seattle Public Library covering over 135,000 authors. Using a staggered differences-in-differences design with matched control groups, we show that prizes boost demand for winners of all backgrounds, but find that effects are over twice as large for minority authors (77 to 97 log points) compared to white authors (35 to 36 log points). However, spillover effects are highly heterogeneous: while same-race spillover estimates are null or positive for most ethnicities, we find that prizes to Black authors generate significant negative spillovers to non-winning Black authors, consistent with demand-side “token consumption” patterns, leading to null net effects of a Black author winning a prize on the readership of books by Black authors overall. These findings suggest that while top-down diversity initiatives may be effective tools for individual creator promotion, they are limited in their ability to achieve broader diversification of cultural goods consumption.
Insuring Consumers Against World Energy Shocks: Pass-Through, Market Power, and the Design of Fuel-Price Stabilization
Pre-PhD Publications
When Context Matters: Uneven Firms’ Innovation Persistence in Developing Countries. Evidence from Uruguay, submitted (with Carlos Bianchi)
Abstract
A large body of literature has identified positive persistence effects of innovation in firms located in developed countries. These works have claimed that that there is a state dependence effect that explains firms’ innovation trajectories in a sort of self-efficient process. However, this is not the rule in developing economies. This article adds novel evidence to this topic by analysing innovation persistence in Uruguayan firms between 2007 and 2018. Using a panel data set from the Uruguayan Innovation Survey, we run parametric and nonparametric estimations of firms’ innovation persistence in manufacturing and service sectors. Our findings indicate that innovation is an uneven, even erratic, process. Contrary to most of the extant research on the topic, we find mostly negative persistence effects of outcome innovation (both product and process) in the short term and positive persistence effects of R&D and innovation activities based on the acquisition of external technology (input innovation) in the medium term. We discuss how firms and context characteristics explain heterogeneous and uneven firms’ innovative trajectories in developing countries, challenging the extended interpretation of innovation as a self-efficient process.
Innovation, work organization and knowledge sharing in Uruguayan firms, Technology Analysis & Strategic Management (with Carlos Bianchi)
Abstract
How work is organised is a critical component of firms’ learning process. Because of that, the relationship between firms’ work organisation and their innovative effort is endogenous in nature and, in turn, causal effects are hardly identifiable. This paper aims to contribute by analysing the effects of organisational work practices oriented toward knowledge sharing and innovative efforts in Uruguayan firms between 2009 and 2015. Our research design allows us to test both the endogenous relationship and the potential causal effects, using econometric panel data techniques and instrumental variables. The results corroborate the endogenous relationship between these variables. Moreover, a positive and significant effect of communication practices on the innovative effort is identified in low-tech manufacturing firms but not in high-tech firms. This result offers valuable implications for public policy and industrial practices in developing countries since it reflects the main features of an innovation pattern that mostly relies on modernisation strategies rather than on high-tech innovations based on R&D.
Dependency change with aging and associated factors in Uruguay: a cohort study, Journal of Aging and Health (with Alejandra Marroig and Graciela Muniz-Terra)
Abstract
Objectives: To assess the heterogeneity of transitions toward dependency in older adults and to explore the robustness of results to different operationalizations of dependency. Method: Using data from people aged 60 years and older from a national representative study in Uruguay (Encuesta Longitudinal de Protección Social, N = 5071), we fitted multinomial regressions adjusted by sociodemographic and health characteristics to model transitions into dependency and death. We used a harder operationalization with basic activities of daily living (Katz-dependency) and Comprehensive-dependency with basic, instrumental, and advanced activities. Results: Increasing age (RRR = 1.08, CI = [1.05; 1.12], p < .001) and having comorbidities (RRR = 2.16, CI = [1.31; 3.57], p = .003) increased the risk of transition from nondependent to dependent using Katz-dependency. Women with at least two chronic conditions have increased risk of Comprehensive-dependency (RRR = 1.79, CI = [1.15; 2.80], p = .010). Discussion: Inconsistencies in findings emerged when evaluating transitions into dependency with the different measures, which may have social care implications.
El aprendizaje entre pares y sus efectos en el desempeño de los estudiantes, Desarrollo y Sociedad
Abstract
Tutorías Entre Pares es un programa desarrollado para mejorar la inserción de las generaciones de ingreso a la educación universitaria. Controlando por características demográficas, académicas y de personalidad, a través de métodos de emparejamiento se busca identificar si el programa tiene efecto sobre distintas dimensiones de los estudiantes. Los resultados muestran que el programa reduce la probabilidad de deserción, siendo una dimensión sobre la cual es esperado que actúe. Por otro lado, se observan resultados positivos sobre dimensiones académicas, de forma que los que participan aprueban más cursos y con mejores calificaciones que estudiantes similares que no participaron. Según estos hallazgos, este programa, destinado a trabajar directamente sobre dimensiones sociales, genera efectos sobre la esfera académica de los participantes. Estos hallazgos podrían representar un punto de partida para la formulación de políticas educativas con objetivos de mejorar las trayectorias en la educación universitaria.