My research interests include industrial organisation, international trade and other applications of microeconomic theory. My current research focuses on the effect of information on the outcomes in imperfectly-competitive goods markets
Publications
A Gravity Model of Remittance Determinants: Evidence from Latin America and the Caribbean (2017). With Marie M Stack and Carlyn Ramlogan-Dobson. Regional Studies 51(5), 737-749.
This paper constructs a microeconomic model of the motivation for remittances and uses it to explore the macroeconomic determinants. In addition, a new measure of bilateral remittances is used to estimate a gravity model of remittances for 27 Latin American and Caribbean countries and 18 industrialized countries. The results suggest remittances are motivated by a combination of altruism and self-interest, both of which are encapsulated by economic and non-economic variables.
This paper constructs a microeconomic model of the motivation for remittances and uses it to explore the macroeconomic determinants. In addition, a new measure of bilateral remittances is used to estimate a gravity model of remittances for 27 Latin American and Caribbean countries and 18 industrialized countries. The results suggest remittances are motivated by a combination of altruism and self-interest, both of which are encapsulated by economic and non-economic variables.
The Choice of Commodity Tax Base in the Presence of Horizontal Foreign Direct Investment (2015). International Tax and Public Finance 22(5), 811-833
We analyse the choice of commodity tax base, when countries set their taxes non-cooperatively in a reciprocal dumping model of homogeneous goods trade with horizontal foreign direct investment (FDI). We show that the consumption base (destination principle) weakly welfare-dominates the production base (origin principle) for a large range of plant fixed costs. When integration is complete, the destination principle dominates the origin principle for all levels of plant fixed costs below which FDI occurs under the origin principle. This contrasts with much of the existing literature which has tended to support the origin principle under imperfect competition with a fixed market structure.
We analyse the choice of commodity tax base, when countries set their taxes non-cooperatively in a reciprocal dumping model of homogeneous goods trade with horizontal foreign direct investment (FDI). We show that the consumption base (destination principle) weakly welfare-dominates the production base (origin principle) for a large range of plant fixed costs. When integration is complete, the destination principle dominates the origin principle for all levels of plant fixed costs below which FDI occurs under the origin principle. This contrasts with much of the existing literature which has tended to support the origin principle under imperfect competition with a fixed market structure.
Economic Integration and the Choice of Commodity Tax Base with Endogenous Market Structures (2010). With Frank Stahler. International Tax and Public Finance 17(2), 91-113
This paper analyses the choice of commodity tax base when countries set their taxes noncooperatively in a two-country symmetric reciprocal dumping model of intraindustry trade with free entry and trade costs. We show that the consumption base (destination principle) dominates the production base (origin principle) when trade costs are high or demand is linear. For lower levels of trade costs and nonlinear demand, the welfare ranking of the two tax bases is ambiguous. Hence, there is no clear preference for a tax principle with an ongoing movement toward closer economic integration.
This paper analyses the choice of commodity tax base when countries set their taxes noncooperatively in a two-country symmetric reciprocal dumping model of intraindustry trade with free entry and trade costs. We show that the consumption base (destination principle) dominates the production base (origin principle) when trade costs are high or demand is linear. For lower levels of trade costs and nonlinear demand, the welfare ranking of the two tax bases is ambiguous. Hence, there is no clear preference for a tax principle with an ongoing movement toward closer economic integration.
Working Papers
Informative Advertising Under Duopoly.
This paper considers a two-stage duopoly model of costless advertising: in the first stage each firm simultaneously chooses the accuracy of signals informing consumers about how much they value its product; in the second stage firms compete in prices. We find that when the distributions of consumers' valuations for each product are identical, independent and symmetric, and the market is covered for any combination of first-stage choices, the subgame-perfect equilibrium involves both firms perfectly informing consumers in order to increase ex post differentiation and reduce price competition. When the market is not covered for all first-stage choices, one firm may no longer choose perfectly accurate signals in equilibrium, as an increase in the informativeness of a signal further lowers the ex post valuation of those consumers indifferent between purchasing or not, causing them to drop out of the market. Numerical results indicate that if the symmetric distribution of valuations is sufficiently peaked, then both firms inform perfectly; otherwise one firm informs perfectly and the other chooses the highest level of informativeness such that the market is covered
This paper considers a two-stage duopoly model of costless advertising: in the first stage each firm simultaneously chooses the accuracy of signals informing consumers about how much they value its product; in the second stage firms compete in prices. We find that when the distributions of consumers' valuations for each product are identical, independent and symmetric, and the market is covered for any combination of first-stage choices, the subgame-perfect equilibrium involves both firms perfectly informing consumers in order to increase ex post differentiation and reduce price competition. When the market is not covered for all first-stage choices, one firm may no longer choose perfectly accurate signals in equilibrium, as an increase in the informativeness of a signal further lowers the ex post valuation of those consumers indifferent between purchasing or not, causing them to drop out of the market. Numerical results indicate that if the symmetric distribution of valuations is sufficiently peaked, then both firms inform perfectly; otherwise one firm informs perfectly and the other chooses the highest level of informativeness such that the market is covered
The Role of Incomplete Information in the Cournot Duopoly. With José Rodrigues-Neto
This paper considers a static Cournot duopoly game with incomplete information regarding firms' marginal costs. Each player knows her own unit cost (low or high), but is uncertain of her opponent's cost. Posterior beliefs are consistent if they admit a common prior. Action symmetry holds if total output does not depend on which player has low or high cost. A player has independent beliefs if her posteriors are the same regardless of her type. Beliefs are essentially the same if each player of each type has the same posteriors about the type of the other player, or if they would be the same after a relabelling of types with low switched with high. We prove that action symmetry and consistent beliefs hold simultaneously if and only if beliefs are essentially the same or both players have independent beliefs. A player has independent beliefs and beliefs are consistent if and only if her opponent has independent beliefs and actions are symmetric. We then investigate the degree to which small departures from each of these properties affects these results.