Research
My research interest lies in Industrial Organisation, Competition Economics and Microeconomic Theory.
Industrial Organisation
My research centers on examining how food retail policies—such as price controls and retail taxes—shape market outcomes in an inflationary environment, with particular attention to variations in market concentration and competition. In addition, I investigate shifts in pricing behavior following the introduction and removal of these policies, as well as the associated political economy implications.
To explore these issues, I am using a proprietary consumer panel dataset to study the effects of price controls on essential food products introduced in Hungary in February 2022, shortly before war broke out in a neighboring country. My approach employs both reduced form and structural methods.
Estimating the welfare effects of retail food price controls: the case of Hungary with Howard Smith (working paper)
Abstract Price controls have been proposed by many governments to improve consumer welfare in various markets. Their welfare impacts are theoretically ambiguous, depending on the market power of supplying firms. This paper analyzes the welfare effects of retail food price caps introduced in Hungary from 2022 to 2023, which aimed to protect consumer welfare by setting caps on certain staple items and imposing quantity floors to avoid supply reductions. Using consumer-level scanner data from 2010 to 2023, we show that the price-capped goods remained readily available and, in some categories, experienced increased quantities. A structural model of demand and supply, incorporating a multi-category store-level choice and retailer Nash pricing, allows us to back out marginal costs and simulate counterfactuals. We find that consumers benefited substantially from the price caps in the milk category, gaining up to 4.3% of their expenditure on milk. However, we also document that prices of substitute products rose faster than inflation, suggesting that while consumers of capped goods might benefit, these policies can prompt retailers to adjust prices of other items upward. Our results highlight that careful policy design and product selection are crucial to achieving net consumer welfare gains.
Microeconomic Theory
A Welfare Analysis of a Steady-State Model of Observational Learning with Margaret Meyer (working paper)
Abstract It is now well understood that when individuals learn not only from private sources of information but also by observing the choices of previous decision-makers, information may fail to be aggregated, and incorrect herds may result. Extrapolating from such findings, the conventional wisdom seems to be that, relative to equilibrium outcomes, efficiency would be improved if individuals relied more on their private information and less on the choices of predecessors. The canonical models of observational learning are, however, not particularly well suited to welfare analysis. In this paper, we develop a flexible, steady-state framework for characterizing equilibrium outcomes under a variety of observation structures, and we use it to examine the existence and form of welfare-improving interventions for a social planner. The steady-state approach transforms the planner’s problem from a dynamic one to an effectively static one. We allow the planner to intervene only by altering the decision rules used by individuals, not by directly altering the information structure. Our key results are as follows: We show that whether there exist welfare-improving adjustments for the planner and what form they take depends very much on the observation structure. In particular, we prove that there is no scope for the planner to improve welfare in a symmetric environment where each individual observes (with noise) the choice of only a single predecessor. For more general observation structures, we identify two distinct forces which can generate inefficiencies; we term these the "dispersion effect" and the "mean effect". We demonstrate that both forces can, for some observed data, make it optimal for individuals to place less rather than more weight on their private information.
Presentation of A Welfare Analysis of a Steady-State Model of Observational Learning by Margaret Meyer