uber2022_922.pdf "Search Frictions, Network Effects and Spatial Competition: Taxis versus Uber" Download
This paper models the search and matching process among passengers, taxis and Uber drivers in New York City to analyze matching efficiency taking into account network effects and supply competition. Drivers make dynamic spatial search decisions across locations for passengers and the latter make static choice decisions between taxi and Uber. Network effects exist if increased participation of one side impacts searches of the other side. I model network effects by adding demand and supply to both sides' decisions. Results indicate existence of network effects. Then, the estimates are used to analyze frictions as spatial mismatches between drivers and passengers in three counterfactual scenarios: restricting supply of Uber, improving traffic condition, and eliminating surge multiplier. The results show that regulating Uber increases mismatches of taxis. Eliminating the surge multiplier increases mismatches of Uber. Traffic improvement increases matching efficiency. Most importantly, ignoring network effects will lead to incorrect welfare conclusions.
"Vertical Relationship and Merger Effects in the US Beer Industry" Download This paper studies the 2008 MillerCoors joint venture in the U.S. beer industry through the framework of a vertically related market. The cost efficiency and increased upstream market power impacts of this merger are quantitively measured and, more importantly, the effect of downstream concentration on pass-through of upstream merger in a vertical relationship is studied. In a vertical relationship, the upstream shock does not fully pass through to retail price because both upstream and downstream firms adjust their pricing post-merger. Downstream concentration not only determines the markups charged by retailers but also affects the capability of upstream firms to exercise their market power. Estimating demand side and supply side in a linear pricing model with double marginalization uncovers the changes of costs and markups using pre/post-merger retail data. The results show that average cost saving of producing a 12 oz serving is 9.27% for Coors and 7.23% for Miller. Brewers' markups increase, while retailers' markups decrease to mitigate the merger impact on retail prices especially for more concentrated downstream markets. The effect of market power is greater than cost saving in this merger. The brewers profit gain dominates the welfare losses of consumers and retailers thereby increasing social welfare in aggregate.
"Consumer Spending under Exclusive Loyalty Programs: Evidence from Gifting in Online Streaming" with Hailin Lu and Xuezhen Tao
Work in progress
"Price Dispersion, Competition, and Brand Preferences in the Chinese Pharmaceutical Industry"
"The Effectiveness of Influencer Marketing"
"Competition and Responsive Pricing in Electric Vehicle Charging Station Market"