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| Publications of Allan Collard-Wexler :chronological alphabetical combined listing:%% 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}, url = {http://dx.doi.org/10.1016/bs.hesind.2021.11.004}, 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}, url = {http://dx.doi.org/10.1257/aer.20171438}, 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}, url = {http://dx.doi.org/10.1086/700729}, 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}, url = {http://dx.doi.org/10.1257/aer.20130090}, 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}, url = {http://dx.doi.org/10.1086/677072}, 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}, url = {http://dx.doi.org/10.1257/mic.6.4.407}, 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}, url = {http://dx.doi.org/10.1257/app.6.3.133}, 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}, url = {http://dx.doi.org/10.3982/ECTA6877}, 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 and Management Strategy}, Volume = {18}, Number = {4}, Pages = {1045-1070}, Publisher = {WILEY}, Year = {2009}, Month = {December}, ISSN = {1058-6407}, url = {http://dx.doi.org/10.1111/j.1530-9134.2009.00237.x}, 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 and Economic Statistics}, Volume = {26}, Number = {3}, Pages = {303-307}, Publisher = {American Statistical Association}, Year = {2008}, ISSN = {0735-0015}, url = {http://dx.doi.org/10.1198/073500108000000150}, Doi = {10.1198/073500108000000150}, Key = {fds302429} } | |
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