I study the effects of aftermarket deterrence on participation and efficiency in essential input auctions. A set of entrants simultaneously chooses whether to participate in an auction for an essential input. This essential input implicitly grants entry rights into an aftermarket. The aftermarket has an incumbent who sees the auction winner and has to choose whether to attempt to deter this entrant or not. Since the incumbent does not know the entrants' costs, the entrants and the incumbent play a signaling game where the incumbent can learn from the entrants' auction participation decision. I characterize this game's unique equilibrium outcome, and show that some entrants always opt not to participate in equilibrium. I show that the incumbent's presence leads to auction winners with higher marginal costs. My results match existing evidence on auction participation in various essential input markets, such as those for airport slots, electromagnetic spectrum, and online advertisement.

Abstract: We study how the saliency of past authoritarian regimes affects privacy concerns, leveraging Germany’s strong culture of Holocaust remembrance. We use detailed street-level data from Berlin to show the effect of Stolpersteine—individual memorials for victims of Nazi persecution—on privacy concerns, measured as blurring requests on Google Street View. To isolate causality, we leverage the quasi-random variation in Stolpersteine location after controlling for victim agglomeration patterns around each address. We show that Stolpersteine cause a localized increase in blurring, with the effect concentrating within 10 meters of a Stolperstein. We also find that Stolpersteine seen while commuting increase blurring. Furthermore, through an experimental survey we show that when Germans are primed to think about the Stolpersteine and Nazi persecution, they respond by spending more time on the experiment’s final consent form. This experimental design together with our blurring measure constitute two novel measures of privacy concerns.

[SSRN] [Extended Abstract at EC'24] [EC'24 Presentation Video]
EC'24 Exemplary Empirics and Experiments Track Paper

2022 Sean Buckley Memorial Award for Best Second-Year Paper, Stanford University, Dept. of Economics

Abstract: We study exploding offers by considering the strategic interaction between a low-tier firm and a set of workers within a large job market. Each worker has a private value for the firm and may receive offers from preferred top-tier firms according to an exogenous stochastic process. We show that more risk averse workers receive offers with shorter deadlines, and that there is a level of risk aversion beyond which a worker only receives offers that expire as soon as possible—independently of what all other firms are doing. If workers are sufficiently risk averse, the workers’ expected welfare is maximized if and only if exploding offers are banned. Finally, any minimal offer length that does not ban exploding offers may lead to workers falling through the cracks. All results are robust to a range of sequentially-rational strategies for the workers. Our predictions match existing evidence and have implications for policies regulating exploding offers.

Abstract: I derive the incentive compatible and individually rational mechanism that maximizes the sum of the buyers' ex-ante expected utilities. I also show that this mechanism minimizes the seller's revenue. When payments are required to be non-negative, my mechanism takes the form of an arbitrarily weighted lottery with no participation fees, and the resulting allocation is generally not ex-post efficient. This means that before learning their valuations and if side payments from the seller to the buyers are not allowed, buyers as a group would be better off if they gave up ex-post efficiency in order to avoid positive payments. When transfers are allowed, the optimal mechanism is a standard auction with no reserve price and where the seller's income is redistributed back to the buyers. This mechanism is robust to speculators if a buyer with value 0 never partakes in the redistribution.

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