NBER Working Papers by Robin S. Lee

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Working Papers

December 2015The Welfare Effects of Vertical Integration in Multichannel Television Markets
with Gregory S. Crawford, Michael D. Whinston, Ali Yurukoglu: w21832
We investigate the welfare effects of vertical integration of regional sports networks (RSNs) with programming distributors in U.S. multichannel television markets. Vertical integration can enhance efficiency by reducing double marginalization and increasing carriage of channels, but can also harm welfare due to foreclosure and raising rivals' costs incentives. We estimate a structural model of viewership, subscription, distributor pricing, and affiliate fee bargaining using a rich dataset on the U.S. cable and satellite television industry (2000-2010). We use these estimates to analyze the impact of simulated vertical mergers and de-mergers of RSNs on competition and welfare, and examine the efficacy of regulatory policies introduced by the U.S. Federal Communications Commission to addre...
October 2014“Nash-in-Nash” Bargaining: A Microfoundation for Applied Work
with Allan Collard-Wexler, Gautam Gowrisankaran: w20641
A “Nash equilibrium in Nash bargains” has become the workhorse bargaining model in applied analyses of bilateral oligopoly. This paper proposes a non-cooperative foundation for “Nash-in-Nash” bargaining that extends the Rubinstein (1982) model to multiple upstream and downstream firms. Assuming there exists gains from trade for each firm pair, we prove that there exists an equilibrium with immediate agreement and negotiated prices that correspond to Rubinstein prices if and only if the marginal contribution of a set of agreements is weakly greater than the sum of the agreements' marginal contributions. We provide stronger conditions under which equilibrium prices are unique.
September 2013Insurer Competition in Health Care Markets
with Kate Ho: w19401
We analyze the impact of insurer competition on health care markets using a model of premium setting, hospital-insurer bargaining, household demand for insurance, and individual demand for hospitals. Increased insurer competition may lead to lower premiums; it may also increase health providers' leverage to negotiate higher prices, thereby mitigating premium reductions. We use detailed California admissions, claims, and enrollment data from a large benefits manager. We estimate our model and simulate the removal of an insurer from consumers' choice sets. Although premiums rise and annual consumer surplus falls by $50-120 per capita, hospital prices and spending fall in certain markets as remaining insurers negotiate lower rates. Overall, the impact on negotiated prices is heterogeneous, wi...
April 2009Interviewing in Two-Sided Matching Markets
with Michael Schwarz: w14922
We introduce the interview assignment problem, which generalizes the one-to-one matching model of Gale and Shapley (1962) by introducing a stage of costly information acquisition. Agents may learn preferences over partners via costly interviews. Although there exist multiple equilibria where all agents receive the same number of interviews, efficiency depends on overlap -- the number of common interview partners among agents. We prove the equilibria with the highest degree of overlap yields the highest probability of being matched. The analysis suggests that institutions which ration interviews or create labor market segmentation may lead to greater efficiency in information acquisition activities.

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