Publications of Allan Collard-Wexler
%% Journal Articles
@article{fds364951,
Author = {Aguirregabiria, V and Collard-Wexler, A and Ryan,
S},
Title = {Dynamic Games in Empirical Industrial Organization},
Year = {2021},
Month = {September},
Key = {fds364951}
}
@article{fds360552,
Author = {Aguirregabiria, V and Collard-Wexler, A and Ryan,
SP},
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}
}
@article{fds342471,
Author = {Asker, J and Collard-Wexler, A and De Loecker,
J},
Title = {(Mis)Allocation, Market Power, and Global Oil
Extraction},
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}
}
@article{fds325892,
Author = {Collard-Wexler, A and Gowrisankaran, G and Lee,
RS},
Title = {“Nash-in-Nash” Bargaining: A Microfoundation for Applied
Work},
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
assumptions.},
Doi = {10.1086/700729},
Key = {fds325892}
}
@article{fds320256,
Author = {Collard-Wexler, A and Loecker, J},
Title = {Production Function Estimation with Measurement Error in
Inputs},
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
large.},
Key = {fds320256}
}
@article{fds357495,
Author = {Collard-Wexler, A and De Loecker and J},
Title = {Production Function Estimation and Capital Measurement
Error},
Year = {2016},
Month = {July},
Key = {fds357495}
}
@article{fds324301,
Author = {Allcott, H and Collard-Wexler, A and O'Connell,
SD},
Title = {How Do Electricity Shortages Affect Industry? Evidence from
India},
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,
Q41)},
Key = {fds324301}
}
@article{fds238059,
Author = {Collard-Wexler, A and De Loecker and J},
Title = {Reallocation and technology: Evidence from the US steel
industry},
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}
}
@article{fds238061,
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}
}
@article{fds238060,
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}
}
@article{fds238064,
Author = {Baccara, M and Collard-Wexler, A and Felli, L and Yariv,
L},
Title = {Child-adoption Matching: Preferences for gender and
race},
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}
}
@article{fds238063,
Author = {Collard-Wexler, A},
Title = {Demand fluctuations in the ready-mix concrete
industry},
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
Society.},
Doi = {10.3982/ECTA6877},
Key = {fds238063}
}
@article{fds238065,
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}
}
@article{fds302429,
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}
}