Vertical Integration and Market Structure

Contractual theories of vertical integration derive firm boundaries as an efficient response to market transaction costs. These theories predict a relationship between underlying features of transactions and observed integration decisions. There has been some progress in testing these predictions, but less progress in quantifying their importance. One difficulty is that empirical applications often must consider firm structure together with industry structure. Research in industrial organization frequently has adopted this perspective, emphasizing how scale and scope economies, and strategic considerations, influence patterns of industry integration. But this research has paid less attention to contractual or organizational details, so that these two major lines of research on vertical integration have proceeded in parallel with only rare intersection. We discuss the value of combining different viewpoints from organizational economics and industrial organization.

The Economics of Internet Markets

The internet has facilitated the creation of new markets characterized by large scale, increased customization, rapid innovation and the collection and use of detailed consumer and market data. I describe these changes and some of the economic theory that has been useful for thinking about online advertising markets, retail and business-to-business e-commerce, internet job matching and financial exchanges, and other internet platforms. I also discuss the empirical evidence on competition and consumer behavior in internet markets and some directions for future research.

Empirical Industrial Organization: A Progress Report

The field of Industrial Organization has made dramatic advances over the last few decades in developing empirical methods for analyzing imperfect competition and the organization of markets. We describe the motivation for these developments and some of the successes. We also discuss the relative emphasis that applied work in the field has placed on economic theory relative to statistical research design, and the possibility that a focus on methodological innovation has crowded out applications. We offer some suggestions about how the field may progress in coming years.

Pricing and Welfare in Health Plan Choice

Prices in government and employer-sponsored health insurance markets only partially reflect insurers' expected costs of coverage for different enrollees. This can create inefficient distortions when consumers self-select into plans. We develop a simple model to study this problem and estimate it using new data on small employers. In the markets we observe, the welfare loss compared to the feasible efficient benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restrictions on risk-rating employee contributions; the rest is due to inefficient contribution choices. Despite the inefficiency, we find substantial benefits from plan choice relative to single-insurer options.

The Case for Enlarging the House of Representatives

This report makes the case for expanding the House of Representatives to bring the American people a little closer to their government, and their government closer to them. The Case for Enlarging the House of Representatives is an independent byproduct of Our Common Purpose: Reinventing American Democracy for the 21st Century, the final report of the American Academy of Arts and Sciences' Commission on the Practice of Democratic Citizenship. The Commission represents a cross-partisan cohort of leaders from academia, civil society, philanthropy, and the policy sphere who reached unanimous agreement on thirty-one recommendations to improve American democracy. The report takes as a premise that political institutions, civic culture, and civil society reinforce one another. A nation may have impeccably designed bodies of government, but it also needs an engaged citizenry to ensure these institutions function as intended. As a result, Our Common Purpose argues that reforming only one of these areas is insufficient. Progress must be made across all three. To build a better democracy, the United States needs better-functioning institutions as well as a healthier political culture and a more resilient civil society

Learning from Seller Experiments in Online Markets

The internet has dramatically reduced the cost of varying prices, displays and information provided to consumers, facilitating both active and passive experimentation. We document the prevalence of targeted pricing and auction design variation on eBay, and identify hundreds of thousands of experiments conducted by sellers across a wide array of retail products. We show how this type of data can be used to address questions about consumer behavior and market outcomes, and provide illustrative results on price dispersion, the frequency of over-bidding, the choice of reserve prices, "buy now" options and other auction design parameters, and on consumer sensitivity to shipping fees. We argue that leveraging the experiments of market participants takes advantage of the scale and heterogeneity of online markets and can be a powerful approach for testing and measurement.

Comparing Open and Sealed Bid Auctions: Theory and Evidence from Timber Auctions

We study entry and bidding patterns in sealed bid and open auctions with heterogeneous bidders. Using data from U.S. Forest Service timber auctions, we document a set of systematic effects of auction format: sealed bid auctions attract more small bidders, shift the allocation towards these bidders, and can also generate higher revenue. We propose a model, which extends the theory of private value auctions with heterogeneous bidders to capture participation decisions, that can account for these qualitative effects of auction format. We then calibrate the model using parameters estimated from the data and show that the model can explain the quantitative effects as well. Finally, we use the model to provide an assessment of bidder competitiveness, which has important consequences for auction choice

Detecting Gravitational-Wave Memory with LIGO: Implications of GW150914

It may soon be possible for Advanced LIGO to detect hundreds of binary black hole mergers per year. We show how the accumulation of many such measurements will allow for the detection of gravitational-wave memory: a permanent displacement of spacetime that comes from strong-field, general relativistic effects. We estimate that Advanced LIGO operating at design sensitivity may be able to make a signal-to-noise ratio 3 (5) detection of memory with ∼35 (90) events with masses and distance similar to GW150914. We highlight the importance of incorporating higher-order gravitational-wave modes for parameter estimation of binary black hole mergers, and describe how our methods can also be used to detect higher-order modes themselves before Advanced LIGO reaches design sensitivity

Agreement and Discrepancy on Emotional and Behavioral Problems Between Caregivers and HIV-Infected Children and Adolescents From Uganda.

Background: HIV-infected children and adolescents (CA-HIV) face significant mental health challenges related to a broad range of biological and psychosocial factors. Data are scarce on the agreement and discrepancy between caregivers and CA-HIV regarding emotional and behavioral problems (EBPs) in CA-HIV. Objectives: We determined agreement between self- versus caregiver- reported EBPs and describe factors associated with informant discrepancy among caregiver-youth dyads who participated in the "Mental health among HIV-infected CHildren and Adolescents in KAmpala and Masaka, Uganda" (CHAKA) study. Methods: In a cross-sectional sample, caregiver-reported EBPs were assessed with the Child and Adolescent Symptom Inventory-5 (CASI-5), and self-reported problems were evaluated with the Youth Inventory-4 (YI-4) in 469 adolescents aged 12-17 years and the Child Inventory-4 (CI-4) in 493 children aged 8-11 years. Adolescents were questioned about experiences of HIV stigma. Caregiver psychological distress was assessed with the Self-Reporting Questionnaire (SRQ-20). Linear regression models were applied to identify variables associated with discrepancy scores. Results: Self-reported emotional problems (EPs) were present in 28.8% of adolescents and 36.9% of children, and 14.5% of adolescents self-reported behavioral problems (BPs). There was only a modest correlation (r ≤ 0.29) between caregiver- and CA-HIV-reported EBPs, with caregivers reporting more EPs whereas adolescents reported more BPs. Informant discrepancy between adolescents and caregivers for BPs was associated with adolescent age and caregiver's employment and HIV status. Among adolescents, EP discrepancy scores were associated with adolescent's WHO HIV clinical stage, caregiver level of education, and caregivers caring for other children. Among children, EP discrepancy scores were associated with child and caregiver age, caregiver level of education, and caregiver self-rated health status. HIV stigma and caregiver psychological distress were also associated with discrepancy, such that adolescents who experienced HIV stigma rated their EPs as more severe than their caregivers did and caregivers with increased psychological distress rated EBPs as more severe than CA-HIV self-rated. Conclusions: EBPs are frequently endorsed by CA-HIV, and agreement between informants is modest. Informant discrepancy is related to unique psychosocial and HIV-related factors. Multi-informant reports enhance the evaluation of CA-HIV and informant discrepancies can provide additional insights into the mental health of CA-HIV