- 03 Feb 2020
- Working Paper Summaries
Competition in Pricing Algorithms
The adoption of pricing technology can lead to higher prices, by increasing the frequency of price changes and/or encoding pricing strategies in algorithms. This raises new antitrust questions for policymakers, as firms do not need to coordinate or collude to raise prices.
- 26 Nov 2018
- Working Paper Summaries
Demand Estimation in Models of Imperfect Competition
The study shows how knowledge about firm behavior can be modeled to better predict demand. Firms tend to raise prices in response to higher demand, so observed relationships between price and quantity can be quite misleading. The authors provide an adjustment that can be used when price experiments or instrumental variables are not available.
- 04 Feb 2018
- Working Paper Summaries
The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation
This study provides the first quasi-experimental estimate of the long-run elasticity (responsiveness) of residential electricity demand, and finds that it is about double the short-run elasticity. Our findings highlight the importance of accounting for consumption dynamics when evaluating energy policy.
- 23 Jan 2018
- Working Paper Summaries
Transaction Costs and the Duration of Contracts
When buyers transact with sellers, they select not only whom to transact with but also for how long. This paper develops a model of optimal contract duration arising from underlying supply costs and transaction costs. The model allows for the quantification of transaction costs, which are often unobserved, and the impact of these costs on welfare.
6 Ways That Emerging Technology Is Disrupting Business Strategy
How are AI, data analytics, and the Internet of Things changing the way business leaders think about strategy? Harvard Business School faculty members discuss how emerging technology has changed the rules of competition. Open for comment; Comment(s) posted.