Pasquale SCHIRALDI

Department of Economics
London School of Economics
Houghton School
London WC2A 2AE

Fields: Industrial Organization, Applied Econometrics, Microeconomic Theory

Teaching

Papers

Automobile Replacement: a Dynamic Structural Approach (new version coming soon)

Abstract: This paper specifies and estimates a structural dynamic model of consumer preferences for new and used durable goods. Its primary contribution is to provide an explicit estimation procedure for transaction costs, which are crucial to capturing the dynamic nature of consumer decisions. In particular, transaction costs play a key role in determining consumer replacement behavior in both primary and secondary markets for durable goods. The data set is collected by the Italian Motor Registry and covers the period from 1994 to 2004. It includes information about sales dates for individual cars over time as well as the initial stock of cars in the sample period. Identification of transaction costs is achieved from the variation in the share of households choosing to hold a given car type each period, and from the share of households choosing to purchase the same car type that period. Specifically, I estimate a random coefficients discrete choice model that incorporates a dynamic optimal stopping problem in the spirit of Rust. I conclude by applying this model to evaluate the impact of scrappage subsidies on the Italian automobile market in 1997 and 1998.

Second-Hand Markets and Collusion by Manufacturers of Semidurable Goods, version

Abstract: The focus of the present work is to study the impact of the second-hand market the collusive behavior. I analyze firms' preferences for having an active second-hand market and whether policies (i.e. leasing policy, buy-back policy and warranty policy) that affect the functioning of the second-hand market strengthen collusion. I show how collective incentives to adopt strategies that strengthen collusion often differ from monopoly incentives to achieve higher profits.

New Product Launch: herd seeking or herd preventing? (with Ting Liu)

Abstract: A monopolist launches a new product to distinct markets. The monopolist does not know the quality of the product while consumers in each market receive some private information about the quality. We study how the monopolist may influence consumer learning by manipulating the launching sequence when both the monopolist and consumers can learn about the quality of the product from previous sales. We derive conditions under which the monopolist prefers a sequential launch to a simultaneous launch. The conditions depend on the price of the product and the general reputation of the product. We derive the optimal number of markets in which the monopolist will launch the product in each period. The monopolist's dynamic equilibrium strategy endogenizes informational herding.