Publications of Allan Collard-Wexler

%% Journal Articles   
   Author = {Aguirregabiria, V and Collard-Wexler, A and Ryan,
   Title = {Dynamic Games in Empirical Industrial Organization},
   Year = {2021},
   Month = {September},
   Key = {fds364951}

   Author = {Aguirregabiria, V and Collard-Wexler, A and Ryan,
   Title = {Dynamic games in empirical industrial organization},
   Journal = {Handbook of Industrial Organization},
   Volume = {4},
   Number = {1},
   Pages = {225-343},
   Year = {2021},
   Month = {January},
   Abstract = {This chapter is organized around three main topics on
             dynamic games in empirical IO: models, econometrics, and
             empirical applications. Section 2 presents the theoretical
             framework, introduces the concept of Markov Perfect Nash
             Equilibrium, discusses existence and multiplicity, and
             describes the representation of this equilibrium in terms of
             conditional choice probabilities. We also discuss extensions
             of the basic framework, including models in continuous time,
             the concepts of oblivious equilibrium and experience-based
             equilibrium, and dynamic games where firms have
             non-equilibrium beliefs. In Section 3, we first provide an
             overview of the types of data used in this literature,
             before turning to a discussion of identification issues and
             results, and estimation methods. We review different methods
             to deal with multiple equilibria and large state spaces,
             describe recent developments for estimating games with
             serially correlated unobservables, and discuss the use of
             machine learning methods to solving and estimating dynamic
             games. Section 4 discusses empirical applications of dynamic
             games in IO. We start describing the first empirical
             applications in this literature during the early 2000s.
             Then, we review recent applications dealing with innovation,
             antitrust and mergers, dynamic pricing, regulation, product
             repositioning, advertising, uncertainty and investment,
             airline network competition, dynamic matching, and natural
             resources. We conclude with our view of the progress made in
             this literature and the remaining challenges.},
   Doi = {10.1016/bs.hesind.2021.11.004},
   Key = {fds360552}

   Author = {Asker, J and Collard-Wexler, A and De Loecker,
   Title = {(Mis)Allocation, Market Power, and Global Oil
   Journal = {American Economic Review},
   Volume = {109},
   Number = {4},
   Pages = {1568-1615},
   Year = {2019},
   Month = {April},
   Abstract = {We propose an approach to measuring the misallocation of
             production in a market that compares actual industry cost
             curves to undistorted (counterfactual) supply curves. As
             compared to traditional, TFPR- based, misallocation
             measures, this approach leverages cost data, such that
             results are readily mapped to welfare metrics. As an
             application, we analyze global crude oil extraction and
             quantify the extent of misallocation therein, together with
             the proportion attributable to market power. From 1970 to
             2014, we find substantial misallocation, in the order of
             US$744 billion, 14.1 percent to 21.9 percent of which is
             attributable to market power.},
   Doi = {10.1257/aer.20171438},
   Key = {fds342471}

   Author = {Collard-Wexler, A and Gowrisankaran, G and Lee,
   Title = {“Nash-in-Nash” Bargaining: A Microfoundation for Applied
   Pages = {163-195},
   Publisher = {University of Chicago Press},
   Year = {2019},
   Month = {February},
   Abstract = {A “Nash equilibrium in Nash bargains” has become a
             workhorse bargaining model in applied analyses of bilateral
             oligopoly. This paper proposes a noncooperative foundation
             for “Nash-in-Nash” bargaining that extends
             Rubinstein’s alternating offers model to multiple upstream
             and downstream firms. We provide conditions on firms’
             marginal contributions under which there exists, for
             sufficiently short time between offers, an equilibrium with
             agreement among all firms at prices arbitrarily close to
             Nash-in-Nash prices, that is, each pair’s Nash bargaining
             solution given agreement by all other pairs. Conditioning on
             equilibria without delayed agreement, limiting prices are
             unique. Unconditionally, they are unique under stronger
   Doi = {10.1086/700729},
   Key = {fds325892}

   Author = {Collard-Wexler, A and Loecker, J},
   Title = {Production Function Estimation with Measurement Error in
   Number = {226},
   Pages = {46 pages},
   Year = {2016},
   Month = {August},
   Abstract = {Production functions are a central component in a variety of
             economic analyses. However, these production functions often
             first need to be estimated using data on individual
             production units. There is reason to believe that, more than
             any other input in the production process, there are severe
             errors in the recording of capital stock. Thus, when
             estimating production functions, we need to account for the
             ubiquity of measurement error in capital stock. This paper
             shows that commonly used estimation techniques in the
             productivity literature fail in the presence of plausible
             amounts of measurement error in capital. We propose an
             estimator that addresses this measurement error, while
             controlling for unobserved productivity shocks. Our main
             insight is that investment expenditures are informative
             about a producer’s capital stock, and we propose a hybrid
             IV-Control function approach that instruments capital with
             (lagged) investment, while relying on standard intermediate
             input demand equations to offset the simultaneity bias. We
             rely on a series of Monte Carlo simulations and find that
             standard approaches yield downward-biased capital
             coefficients, while our estimator does not. We apply our
             estimator to two standard datasets, the census of
             manufacturing firms in India and Slovenia, and find capital
             coefficients that are, on average, twice as
   Key = {fds320256}

   Author = {Collard-Wexler, A and De Loecker and J},
   Title = {Production Function Estimation and Capital Measurement
   Year = {2016},
   Month = {July},
   Key = {fds357495}

   Author = {Allcott, H and Collard-Wexler, A and O'Connell,
   Title = {How Do Electricity Shortages Affect Industry? Evidence from
   Journal = {American Economic Review},
   Volume = {106},
   Number = {3},
   Pages = {587-624},
   Year = {2016},
   Month = {March},
   Abstract = {We estimate the effects of electricity shortages on Indian
             manufacturers, instrumenting with supply shifts from
             hydroelectric power availability. We estimate that India's
             average reported level of shortages reduces the average
             plant's revenues and producer surplus by 5 to 10 percent,
             but average productivity losses are significantly smaller
             because most inputs can be stored during outages. Shortages
             distort the plant size distribution, as there are
             significant economies of scale in generator costs and
             shortages more severely affect plants without generators.
             Simulations show that offering interruptible retail
             electricity contracts could substantially reduce the impacts
             of shortages. (JEL D24, L60, L94, O13, O14,
   Key = {fds324301}

   Author = {Collard-Wexler, A and De Loecker and J},
   Title = {Reallocation and technology: Evidence from the US steel
   Journal = {American Economic Review},
   Volume = {105},
   Number = {1},
   Pages = {131-171},
   Publisher = {American Economic Association},
   Year = {2015},
   Month = {January},
   ISSN = {0002-8282},
   Abstract = {We measure the impact of a drastic new technology for
             producing steel the minimillon industry-wide productivity in
             the US steel industry, using unique plant-level data between
             1963 and 2002. The sharp increase in the industry's
             productivity is linked to this new technology through two
             distinct mechanisms: (i ) the mere displacement of the older
             technology (vertically integrated producers) was responsible
             for a third of the increase in the industry's productivity,
             and (ii ) increased competition, due the minimill expansion,
             drove a productivity resurgence at the surviving vertical
             integrated producers and, consequently, the productivity of
             the industry as a whole.},
   Doi = {10.1257/aer.20130090},
   Key = {fds238059}

   Author = {Asker, J and Collard-Wexler, A and Loecker, JD},
   Title = {Dynamic inputs and resource (Mis)allocation},
   Journal = {Journal of Political Economy},
   Volume = {122},
   Number = {5},
   Pages = {1013-1063},
   Publisher = {University of Chicago Press},
   Year = {2014},
   Month = {October},
   ISSN = {0022-3808},
   Abstract = {We investigate the role of dynamic production inputs and
             their associated adjustment costs in shaping the dispersion
             of static measures of capital misallocation within
             industries (and countries). Across nine data sets spanning
             40 countries, we find that industries exhibiting greater
             time-series volatility of productivity have greater
             cross-sectional dispersion of the marginal revenue product
             of capital. We use a standard investment model with
             adjustment costs to show that variation in the volatility of
             productivity across these industries and economies can
             explain a large share (80-90 percent) of the cross-industry
             (and cross-country) variation in the dispersion of the
             marginal revenue product of capital.},
   Doi = {10.1086/677072},
   Key = {fds238061}

   Author = {Collard-Wexler, A},
   Title = {Mergers and sunk costs: An application to the ready-mix
             concrete industry},
   Journal = {American Economic Journal: Microeconomics},
   Volume = {6},
   Number = {4},
   Pages = {407-447},
   Publisher = {American Economic Association},
   Year = {2014},
   Month = {January},
   ISSN = {1945-7669},
   Abstract = {Horizontal mergers have a large impact by inducing a
             long-lasting change in market structure. Only in an industry
             with substantial entry barriers is a merger not immediately
             counteracted by postmerger entry. To evaluate the duration
             of the effects of a merger, I use the model of Abbring and
             Campbell (2010) to estimate demand thresholds for entry and
             for exit. These thresholds, along with the process for
             demand, are estimated using data from the ready-mix concrete
             industry. Simulations predict that a merger from duopoly to
             monopoly generates between nine and ten years of monopoly in
             the market.},
   Doi = {10.1257/mic.6.4.407},
   Key = {fds238060}

   Author = {Baccara, M and Collard-Wexler, A and Felli, L and Yariv,
   Title = {Child-adoption Matching: Preferences for gender and
   Journal = {American Economic Journal: Applied Economics},
   Volume = {6},
   Number = {3},
   Pages = {133-158},
   Publisher = {American Economic Association},
   Year = {2014},
   Month = {January},
   ISSN = {1945-7782},
   Abstract = {This paper uses a new dataset on child-adoption matching to
             estimate the preferences of potential adoptive parents over
             US-born and unborn children relinquished for adoption. We
             identify significant preferences favoring girls and against
             African American children put up for adoption. These
             attitudes vary in magnitudes across different adoptive
             parents-heterosexual, same-sex couples, and single women. We
             consider the effects of excluding single women and same-sex
             couples from the process, and find that this would
             substantially reduce the overall number of adopted children.
             (JEL C78, J13, J15, J16).},
   Doi = {10.1257/app.6.3.133},
   Key = {fds238064}

   Author = {Collard-Wexler, A},
   Title = {Demand fluctuations in the ready-mix concrete
   Journal = {Econometrica},
   Volume = {81},
   Number = {3},
   Pages = {1003-1037},
   Publisher = {The Econometric Society},
   Year = {2013},
   Month = {May},
   ISSN = {0012-9682},
   Abstract = {I investigate the role of demand shocks in the ready-mix
             concrete industry. Using Census data on more than 15,000
             plants, I estimate a model of investment and entry in
             oligopolistic markets. These estimates are used to simulate
             the effect of eliminating short-term local demand changes. A
             policy of smoothing the volatility of demand has a market
             expansion effect: The model predicts a 39% increase in the
             number of plants in the industry. Since bigger markets have
             both more plants and larger plants, a demand-smoothing
             fiscal policy would increase the share of large plants by
             20%. Finally, the policy of smoothing demand reduces entry
             and exit by 25%, but has no effect on the rate at which
             firms change their size. © 2013 The Econometric
   Doi = {10.3982/ECTA6877},
   Key = {fds238063}

   Author = {Chandra, A and Collard-Wexler, A},
   Title = {Mergers in two-sided markets: An application to the Canadian
             newspaper industry},
   Journal = {Journal of Economics 
             Management Strategy},
   Volume = {18},
   Number = {4},
   Pages = {1045-1070},
   Publisher = {WILEY},
   Year = {2009},
   Month = {December},
   ISSN = {1058-6407},
   Abstract = {In this paper, we study mergers in two-sided industries and,
             in particular, the effects of mergers in the newspaper
             industry. We present a model which shows that mergers in
             two-sided markets may not necessarily lead to higher prices
             for either side of the market. We test our conclusions by
             examining a spate of mergers in the Canadian newspaper
             industry in the late 1990s. Specifically, we analyze prices
             for both circulation and advertising to try to understand
             the impact that these mergers had on consumer welfare. We
             find that greater concentration did not lead to higher
             prices for either newspaper subscribers or advertisers. ©
             2009 Wiley Periodicals, Inc.},
   Doi = {10.1111/j.1530-9134.2009.00237.x},
   Key = {fds238065}

   Author = {Collard-Wexler, A},
   Title = {Discussion of Tamer and Arradillas-Lopez},
   Journal = {Journal of Business & Economic Statistics},
   Volume = {26},
   Number = {3},
   Pages = {303-307},
   Publisher = {American Statistical Association},
   Year = {2008},
   ISSN = {0735-0015},
   Doi = {10.1198/073500108000000150},
   Key = {fds302429}