The elimination of long-term contracts and early termination fees (ETFs) in the US wireless industry at the end of 2015 increased monthly service fees by 2 to 5 percent. Nevertheless, consumers are clearly better off without ETFs. While firms’ revenues from ETFs vanish, their profits from monthly fees increase. As a result, the overall effect on producer profits is less clear.
Alex is a Senior Economist. His primary research interests are in Microeconomics and Industrial Organization with focus on empirical dynamic models of consumer and producer behavior.
Staff Working Papers
Demand for Payment Services and Consumer Welfare: The Introduction of a Central Bank Digital CurrencyUsing a two-stage model, we study the determinants of Canadian consumers’ choices of payment method at the point of sale. We estimate consumer preferences and adoption costs for various combinations of payment methods. We analyze how introducing a central bank digital currency would affect the market equilibrium.
Explaining the Interplay Between Merchant Acceptance and Consumer Adoption in Two-Sided Markets for Payment MethodsRecent consumer and merchant surveys show a decrease in the use of cash at the point of sale. Increasingly, consumers and merchants have access to a growing array of payment innovations as substitutes for cash.
This paper develops and estimates a model of firm-level fixed capital investment when firms face borrowing constraints.
Proportional reduction is a common cartel practice in which cartel members reduce their output proportionately. We develop a method to quantify this reduction relative to a benchmark market equilibrium scenario and relate the reduction to the traditional conduct parameter.
- "Measuring consumer switching costs in the television industry". RAND Journal of Economics, Vol.47, No.2, Summer 2016, pp.366-393.
- "Quality overprovision in cable television markets"
(with Gregory Crawford and Matthew Shum). American Economic Review. Vol.109. No.3, forthcoming.
Work in progress
- "Firm-level investment under imperfect capital markets in Ukraine". Revise and Resubmit to JEMS.
- "Explaining the interplay between acceptance and usage of payment methods in two-sided markets"
(with Kim P. Huynh and Gradon Nicholls).
- "Welfare analysis of equilibria with and without early termination fees in the U.S. wireless industry"
(with Nicolas Schutz and Joseph Cullen).
- "Government regulation as collusion facilitating device: evidence from Ukrainian white sugar industry in 1993-2000".
- "Measuring consumer switching costs in the wireless industry"
(with Joseph Cullen).
- "Identifying collusion under proportional reduction"
(with Naoki Wakamori)
- "Demand for payment services"
(with Kim P. Huynh and Jozsef Molnar)