Related papers: The Micro-Aggregated Profit Share
The idea that research investments respond to market rewards is well established in the literature on markets for innovation (Schmookler, 1966; Acemoglu and Linn, 2004; Bryan and Williams, 2021). Empirical evidence tells us that a change in…
This paper investigates the extent of political rent seeking in Hungary in the 2010s. Political capitalism--where powerful private interests influence public policy for private gain--creates opportunities for rent seeking that vary across…
We study the efficiency of allocations in large markets with a network structure where every seller owns an edge in a graph and every buyer desires a path connecting some nodes. While it is known that stable allocations in such settings can…
This study examines the dynamic asset market linkages under the COVID-19 global pandemic based on market efficiency, in the sense of Fama (1970). Particularly, we estimate the joint degree of market efficiency by applying Ito et al.'s…
This paper considers trial-offer markets where consumer preferences are modeled by a multinomial logit with social influence and position bias. The social signal for a product is given by its current market share raised to power r (or…
In many markets, like electricity or cloud computing markets, providers incur large costs for keeping sufficient capacity in reserve to accommodate demand fluctuations of a mostly fixed user base. These costs are significantly affected by…
Since the 1990s, widespread introduction of central (wholesale) electricity markets has been seen across multiple continents, driven by the search for efficient operation of the power grid through competition. The increase of renewables has…
This paper analyzes the strategic interactions between a profit-maximizing monopolist and a free, capacity-constrained public option. By restricting its own supply, the monopolist intentionally congests the public option and induces…
In a recent Nature paper, Gabaix et al. \cite{Gabaix03} presented a theory to explain the power law tail of price fluctuations. The main points of their theory are that volume fluctuations, which have a power law tail with exponent roughly…
Situations where a group of agents come together to jointly buy a resource that they individually cannot afford to buy are commonly observed in markets. For example in the US market for radio spectrum, a recent proposal invited small firms…
The average economic agent is often used to model the dynamics of simple markets, based on the assumption that the dynamics of many agents can be averaged over in time and space. A popular idea that is based on this seemingly intuitive…
The goal of this paper is to disentangle the roles of volume and of participation rate in the price response of the market to a sequence of transactions. To do so, we are inspired the methodology introduced in arXiv:1402.1288,…
Urban scaling theory explains the increasing returns to scale of urban wealth indicators by the per capita increase of human interactions within cities. This explanation implicitly assumes urban areas as isolated entities and ignores their…
The participation of renewable energy sources in energy markets is challenging, mainly because of the uncertainty associated with the renewables. Aggregation of renewable energy suppliers is shown to be very effective in decreasing this…
We introduce pricing formulas for competition and collusion models of two-sided markets with an outside option. For the competition model, we find conditions under which prices and consumer surplus may increase or decrease if the outside…
Power law distributions of macroscopic observables are ubiquitous in both the natural and social sciences. They are indicative of correlated, cooperative phenomena between groups of interacting agents at the microscopic level. In this paper…
Decentralized electricity markets are often dominated by a small set of generator companies who control the majority of the capacity. In this paper, we explore the effect of the total controlled electricity capacity by a single, or group,…
This work presents the results of an empirical research with the target of modeling the stylized facts of the daily expost System Marginal Price (SMP) of the Greek wholesale electricity market, using data from January 2004 to December of…
Electricity markets are experiencing a rapid increase in energy storage unit participation. Unlike conventional generation resources, quantifying the competitive operation and identifying if a storage unit is exercising market power is…
We address the question of market efficiency using the Minority Game (MG) model. First we show that removing unrealistic features of the MG leads to models which reproduce a scaling behavior close to what is observed in real markets. In…