Research

I quantify the welfare implications of competition and capacity constraints on the spatial allocation of supply in transportation markets. Using new data on shared electric scooters, I analyze the market using a dynamic spatial structural model incorporating the role of capacity constraints, economies of density, and dynamic externalities across locations on firms’ decisions. Counterfactual simulations show that by internalizing the trade-off between business stealing and spatial differentiation, a monopolist would improve welfare by 27% compared to the current duopoly. Imposed citywide capacity constraints have a regressive nature, causing distributional concerns between high and low-income areas.

We develop a novel structural model to represent individual transportation decisions and the equilibrium road traffic levels and speeds inside a city. The model has two advantages relative to the existing frameworks. First, it is micro-founded and has a high level of heterogeneity. Individuals differ in access to transportation modes, values of travel time, and schedule constraints; road congestion technologies vary within the city. Secondly, we estimate the model parameters from publicly available data. We apply our model to Paris metropolitan area to predict the road traffic equilibria under driving restrictions and road tolls and measure the policies' welfare consequences.

In oligopolistic markets, multiproduct firms differentiate their product offerings just enough to prevent cannibalization of their own sales and to avoid creating gaps in the product space that could be profitably filled by new entrants. As technological progress makes entry less expensive, new firms can enter the market with differentiated product offerings. However, this makes also releasing more products to the incumbents less expensive. In this paper we investigate how much of the variation in incumbents’ product offerings is coming from increased competition and how much from technological change. To answer this question, we use novel data to study the entry of 2 firms to the 2 incumbents Peruvian Mobile Telecommunications Market. We find preliminary evidence that incumbents started offering more plans with higher variation in the number of minutes and gigabytes offered after entry, but it is not clear which part is coming from technological constraints or lack of competition between incumbents. To disentangle these effects, we develop a structural model. Our results highlight the importance of reducing factors different from entry cost that delay entry, like municipal permits.