Department of Economics
University of Chicago
1126 East 59th Street
Chicago, IL 60637
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
NBER Working Papers and Publications
|August 2014||Consumer Price Search and Platform Design in Internet Commerce|
with Liran Einav, Jonathan Levin, Neel Sundaresan: w20415
Search frictions can explain why the "law of one price" fails in retail markets and why even firms selling commodity products have pricing power. In online commerce, physical search costs are low, yet price dispersion is common. We use browsing data from eBay to estimate a model of consumer search and price competition when retailers offer homogeneous goods. We find that retail margins are on the order of 10%, and use the model to analyze the design of search rankings. Our model explains most of the effects of a major re-design of eBay's product search, and allows us to identify conditions where narrowing consumer choice sets can be pro-competitive. Finally, we examine a subsequent A/B experiment run by eBay that illustrates the greater difficulties in designing search algorithms for diffe...
American Economic Review (Forthcoming)
|January 2014||Did the Fiscal Stimulus Work for Universities?|
with Caroline M. Hoxby, Jonathan Meer, Pablo Villanueva
in How the Financial Crisis and Great Recession Affected Higher Education, Jeffrey R. Brown and Caroline M. Hoxby, editors
We investigate how stimulus-motivated federal funding directed to universities affected their revenues, expenditures, employment, tuition, student aid, endowment spending, and receipt of state government appropriations. We also investigate how these funds affected the economies of the counties in which the institutions are located. To overcome the potential endogeneity of federal funds (for instance, federal student aid rising when students become poorer), we employ: (i) an instrument that applies nation-wide rates of increase in research funding by agency to universities whose initial dependence on these agencies differs; and (ii) an instrument that applies the change in the maximum Pell Grant to institutions with varying initial numbers of students eligible for the maximum grant. Our res...