“Quitters Never Win: The Incentive Effects of Competing with Superstars.” 2007. (Job Market Paper)

Managers use internal competition to motivate worker effort, yet I present a simple economic model suggesting that the benefits of competition depend critically on workers' relative abilities---large differences in skill may reduce competitors' efforts. This paper uses panel data from professional golfers and finds that the presence of a superstar in a rank-order tournament is associated with lower competitor performance. On average, higher-skill PGA golfers' tournament scores are 0.8 strokes higher when Tiger Woods participates, relative to when Woods is absent. Lower-skill players' scores appear unaffected by the superstar's presence. The adverse superstar effect increases during Woods's streaks and disappears during Woods's slumps. There is no evidence that reduced performance is due to "riskier" play.

"Shrouded Attributes and Information Suppression: Evidence from the Field." 2007 (with Tanjim Hossain & John Morgan)
Revise and Resubmit at Quarterly Journal of Economics

We use field and natural experiments in online auctions to study the revenue effect of varying the level and disclosure of shipping charges. Our main findings are: (1) disclosure affects revenues--for low shipping charges, a seller is better off disclosing; (2) increasing shipping charges boosts revenues particularly when these charges are hidden; and (3) the level and disclosure of the shipping charge have little effect on the number of bidders attracted to an auction.

“How much is a Dollar Worth? Tipping versus Equilibrium Coexistence on Competing Online Auction Sites.” 2006 (with John Morgan)
Revise and resubmit at Journal of Political Economy

The equilibrium model of Ellison, Fudenberg, and Möbius (2004) predicts that, if two competing auction sites are coexisting, then seller revenues and buyer-seller ratios on each site should be approximately equal. We examine these hypotheses using field experiments selling identical items on the eBay and Yahoo auction sites. We find evidence that is inconsistent with the equilibrium hypotheses, and suggest that the eBay-Yahoo market is in the process of tipping. Robust statistical tests indicate that revenues on eBay are consistently 20 to 70 percent higher than those on Yahoo. In addition, eBay auctions attract approximately two additional buyers per seller than equivalent Yahoo auctions. We also vary the Yahoo ending rule from a hard close to soft close but find no statistically or economically significant changes in revenue or numbers of bidders. Moreover, the magnitude of the revenue and buyer-seller ratio disparities remain inconsistent with the notion of equilibrium coexistence even after accounting for various differentiators between the sites.

“Sales: Tests of Theories on Causality and Timing.” Department of Agricultural & Resource Economics, UCB. CUDARE Working Paper 1031. 2007. (with Peter Berck, Jeff Perloff & Sofia Villas-Boas)

Modern theories of sales make conflicting predictions about temporal patterns of sales, which we test using grocery scanner data. We examine both frozen (storable) and refrigerated orange juice to determine what role-if any-durability plays in the sales patterns. We start with a simple reduced-form probit analysis examining the timing of sales and who determines sales: nationally the manufacturers or locally the retailers. We turn to a vector autoregressive analysis and conduct Granger tests of temporal ordering ("causality tests") to determine whether the sale of one brand is followed in a predictable way by the sale of another brand or its own later sales. Based on the VAR estimates, we simulate impulse responses to determine the magnitude of these effects. In fact, none of the theories of sales fully describes sale patterns and price distributions. We find product durability makes little difference in sales patterns and contrary to all the existing theories, retailers rather than manufacturers determine sales. Despite sale patterns not being significantly different for national brands and private label brands, formal Granger causality analysis shows a sale of a national brand to be more likely to "cause" sales of other products than a sale of a private label product.