Seller Curation in Platforms
This article explores why market platforms avoid screening sellers in situations where screening costs are minimal. Consumers in a platform's market must search for a seller whose product is a good match. The presence of low-quality sellers softens competition between sellers, increasing equilibrium price and the platform's revenue per sale. If the platform's market is sufficiently competitive then it admits a positive proportion of low-quality sellers. The ability to recommend a high-quality seller and search obfuscation are complementary strategies because the recommended seller attracts many consumers at a relatively high price.
Media Provision With Outsourced Content Production
I use a model with a platform facilitating interaction between consumers, advertisers, and content creators to explore the effects of introducing a subscription which allows consumers to avoid ads. The subscription increases provision of niche content, but increased advertising and a high subscription price may reduce the welfare of consumers who enjoy mass market content. The effect on total welfare depends on how much the platform increases payments to content creators as a result of the subscription.
Learning While Shopping: An Experimental Investigation Into the Effect of Learning on Recall in Consumer SearchDownload
In many consumer search environments, searchers do not know the precise distribution of prices in the market before they begin searching. I conduct an experiment which explores the implications of a broad class of search problems in an environment with learning about the distribution of payoffs. My results support the common theoretical prediction that learning results in monotonically declining reservation values, providing evidence that learning may be an explanation for declining reservation utility and recall seen in field data. However, many subjects do not use a myopic reservation value strategy, instead choosing to set a high reservation value in order to learn about the distribution before adjusting based on their observations.
Going the Last Mile: Access Regulation and Vertical IntegrationDownload
In many markets entry requires a significant infrastructure investment which can lead to inefficiently low competition and even monopolies in many cases. One solution adopted by many countries is to require the owner of this infrastructure to allow competitors to rent access at a regulated price. In this case the network owner becomes a wholesale provider of infrastructure services who is also participating in the retail market. Another solution is to separate the network owner into a wholesale firm and a vertically separate retail firm. This paper compares infrastructure quality investment incentives for the network owner under these two regimes. Retail prices will be higher under the vertically separated regime, meaning that quality investment will attract more consumers with a separated firm, but the ability to participate on the retail market in addition to the heavily regulated wholesale market means that a vertically integrated owner will have more incentive to invest when there is significant horizontal differentiation between retail firms.
A theoretical exploration of the interplay between the psychological and neurological systems involved in decision making and self-regulationDownload
There is a strong body of evidence supporting the concept of dual-system or “dual-self” models of self-control. Most theoretical examinations of this concept take the form of principal-agent models with varying mechanisms by which the principal can influence the actions of the agent. However no theoretical examination has incorporated the empirical findings from psychology which support the psychological “strength model” of self-control., most notably that self-regulation is a limited resource which acts like a muscle in that it can be strengthened with exercise and which atrophies with disuse. We develop an economic treatment of the strength model based on findings from Baumeister and other psychologists, then apply it in the context of savings and precommitment, as well as examining the role of initialization costs and framing. Possible extensions to this model include an additional utility cost to self-control, stochastic or uncertain difficulty of self-regulation, and exogenous factors drawing upon the mental energy resource used to self-regulate.
An experimental investigation into the effects of disctraction on inter-temporal discounting and ability to delay gratification.Download
A number of models in the literature and several experiments show that a high cognitive load will lead to individual decision makers selecting emotionally appealing options over less appealing but, in the long run more advantageous, alternatives. There has been little work examining the effects of cognitive load on intertemporal financial decisions. Researchers used data from an experiment run with 45 college students to test whether filling out a survey under conditions of distraction would elicit higher discounting rates than completing it with no distractions. Additionally, a choice of a small immediate or larger delayed reward was offered at the end of the survey. Researchers found evidence suggesting that ability to defer consumption options that are immediately available is impaired when participants are distracted, but when making decisions about consumption options which are unavailable until a later time, the distraction condition had little effect.