skip to navigation skip to content
 

Economics & Policy

Economics and Policy group members

The Economics & Policy group analyses how economics can improve economic growth and business performance; and how public policy can be improved to enhance economic growth, sustainability and the quality of life.

The research of the group falls broadly into the following categories:

  • Competition policy and regulation (Christos Genakos)
  • Decision-making under extreme uncertainty (Jochen Runde)
  • Energy economics and policy (David Reiner and Michael Pollitt)
  • Econometric and statistical methods (Paul Kattuman and Christos Genakos)
  • Explanation in the social sciences (Jochen Runde)
  • Innovation (Michael Kitson and Christos Genakos)
  • Macroeconomic policy and performance (Michael Kitson)
  • Productivity measurement and the regulation of utilities (Michael Pollitt and Christos Genakos)
  • Social ontology and the ontology of technology (Jochen Runde and Philip Faulkner)
  • The modelling of public policy, particularly concerning climate change (Chris Hope)
  • Auctions and negotiations (Michael Pollitt)
  • Behavioural economics (Michael Pollitt and Christos Genakos)
  • Industrial organisation (Christos Genakos)

Faculty

  • Genakos, Christos
    University Senior Lecturer in Economics
  • Kattuman, Paul
    Reader in Economics, Director of Teaching
  • Kitson, Michael
    University Senior Lecturer in International Macroeconomics, Deputy Director of the MBA Programme
  • Pollitt, Michael
    Professor of Business Economics, Director of the MPhil in Technology Policy Programme, Assistant Director of the Energy Policy Research Group, Head of the Economics & Policy Subject Group
  • Reiner, David
    University Senior Lecturer in Technology Policy
  • Runde, Jochen
    Professor of Economics & Organisation, Director of Faculty
  • Soufani, Khaled
    Faculty (Professor level) in Management Practice, Director of the Executive MBA Programme, Director of the Circular Economy Centre, Director of the Middle East Research Centre

Lecturer and Senior Lecturer are equivalent to Assistant Professor in North American terminology. Reader is equivalent to Associate Professor with tenure in North American terminology.

Research & teaching staff

PhD students

Honorary appointments

The research of the group is informed and stimulated by regular interactions with a wide range of regional, national and international organisations such as: the European Union; the Department of Business Energy and Industrial Strategy; National Infrastructure Commission; the US Environmental Protection Agency; UK Met Office and Committee on Climate Change; and the Office of Gas and Electricity Markets (Ofgem). It provides advice and policy inputs at Prime Ministerial and Ministerial levels in the UK and abroad.

The group also maintains long-standing collaborations with leading academic institutions around the world including Stanford University Energy Modelling Forum, MIT's Center for Energy and Environmental Policy and CSIRO.

Members of the group are also actively engaged in business and policy engagement through:

  • the Centre for Business Research (CBR), which conducts interdisciplinary research on enterprise, innovation and governance in contemporary market economies, and whose research is used by managers, policy-makers and regulators in numerous countries.
  • the Energy Policy Forum (EPF), which facilitates knowledge exchange between the Energy Policy Research Group (EPRG) and a range of organisations including government departments, regulators, energy companies and consumer organisations.
  • the Centre for Science and Policy (CSaP), whose aim is to improve public policy through the more effective use of evidence and expertise. It does this by facilitating visits to the University of Cambridge of civil servants from various government departments and agencies, as well as leading private companies with technology policy interests.

The members of the group publish in leading journals and also disseminate their work through other channels to ensure the maximum impact on policy and practice. The CBR, EPRG and UK-IRC also produce a range of publications and presentations which are available via their websites:

Upcoming seminars

Michaelmas Term 2018

Electric Power Distribution in the World: Today & Tomorrow
Dr Sinan Kufeoglu, Cambridge Judge Business School

12:30-14:00, 9 October 2018
Room W2.02, Cambridge Judge Business School

This seminar is organised in association with the Energy Policy Research Group at the Cambridge Judge Business School.

Speaker bio

Sinan Kufeoglu received his BSc degree in electrical and electronics engineering from the Middle East Technical University, Turkey, in 2009 and the MSc degree from Aalto University, School of Electrical Engineering, Finland, in 2011. He earned his DSc degree in technology in 2015. Sinan worked as an Honorary Research Associate at University College London, Institute for Sustainable Resources. In addition, he has been carrying out a research collaboration with Kyushu Institute of Technology, Japan in the field of microgrids. He is a Research Associate at the Energy Policy Research Group at Cambridge Judge Business School and is working on electricity tariff reform and distribution network charges. His research interests include electric power reliability, demand response and energy policy.

Fiscal Space: What Have We Learnt Since the Crises?
Professor Jagjit Chadha, National Institute of Economic and Social Research

18:00-19:30, 10 October 2018
Ramsden Room, St Catharine's College, University of Cambridge

This seminar is organised in association with the Cambridge Political Economy Society and held at St Catharine's College.

Abstract

Jagjit Chadha will talk on the traditional approach to fiscal policy, which involves respecting the simple notion of debt sustainability. This over-riding concern has led to considerable weight being placed on cutting public expenditure following a ballooning in public debt after the great financial crisis. The research has also formulated a sequence of fiscal rules and around the world observe that Councils have been developed to support the credibility of fiscal policy under uncertainty. But have we done the right thing? Jagjit will consider a number of possible extensions to the standard response of seeking to reduce debt and limiting taxation. First, he shall examine how episodes of high public debt are successfully reversed? Secondly, it shall be considered what links between monetary and fiscal policy that are overlooked, in particular by drawing on the experience of QE. Thirdly, how are the prescriptions for monetary and fiscal policy affected by market incompleteness? And finally, what role does the debt management of maturity and debt instruments play setting fiscal policy? Jagjit will illustrate with examples from the past and from the recent crisis in the Euro Area and suggest that current settlement of tight monetary-fiscal policy may be responsible for the economic trap of low growth.

Speaker bio

Jagjit Chadha is Director of the National Institute of Economic and Social Research. He is on a full-time absence of leave as Professor of Economics at the University of Kent and was a part-time Professor of economics at Cambridge. He was previously Professor of Economics at the University of St Andrews and Fellow at Clare College, University of Cambridge. He has worked at the Bank of England as an Official working on Monetary Policy and as Chief Quantitative Economist at BNP Paribas. He has acted as Specialist Adviser to the House of Commons Treasury Committee and academic adviser to both the Bank of England and HM Treasury. He sits on the Research Committee of the Economics and Social Research Council and on the REF2020 panel. His main research interests are developing the links between finance and macroeconomics in general equilibrium models and he has published widely in economics journals. He has just completed a British Academy Grant to study fiscal data in the 19th Century.

Experience Markets: An Application to Outsourcing and Hiring
Dr Catherine Thomas, London School of Economics

12:30-14:00, 17 October 2018
Room W4.05, Cambridge Judge Business School

Abstract

Employers in a large online global labour market learn their value for the market only through experimenting. Early experience affects employer selection into posting further jobs, increases the perceived value of using the market, and alters how employers evaluate individual workers.

The majority of employers quickly learn that the market is less valuable to them that their next best alternative and exit the market. Participation decisions are relatively insensitive to variation in the hourly wage bids that employers receive and to learning-by-doing in the market.

Low market take-up rates are consistent with there being unanticipated and heterogeneous employer costs of reorganising to coordinate remote and fragmented stages of production.

Speaker bio

Dr Catherine Thomas joined the London School of Economics Department of Management in 2012 as an Associate Professor. She is a research fellow of the Centre for Economic Policy Research and a research associate of the Centre for Economic Performance.

Between 2006 and 2012, she was an Assistant Professor of Economics at Columbia Business School. Her PhD is in Business Economics from Harvard University and she has an MA in Economics from the University of Edinburgh. She worked for three years at McKinsey and Company before starting her PhD.

Catherine's research focuses on three aspects of international economic integration: (1) how firms engage in offshoring, (2) how firms make outsourcing decisions, and (3), the performance consequence of firms' organisational and ownership structures. She has published papers in economics and management journals and also serves on several editorial boards.

The Technical, Environmental & Economic Implications for Power Systems of Phasing out Coal & Nuclear
Professor Pedro Linares, Comillas Pontifical University

12:30-14:00, 23 October 2018
Keynes Room, Faculty of Economics

This seminar is organised in association with the Energy Policy Research Group at the Cambridge Judge Business School.

Speaker bio

Pedro Linares is Professor of Industrial Engineering of the ICAI School of Engineering, Comillas Pontifical University. His is also Director of the BP Chair on Energy and Sustainability, as well as Co-Founder and Director of Economics for Energy. He is interested in many topics, most of them connected by a broad idea of sustainability, understood as an integral concept that encompasses economics, the environment, social capital, innovation, and justice. He mostly devotes his research to study the relationship between energy, economics and environment, and specifically sustainable energy policy, energy efficiency, and energy models. He is also interested in decision making (in particular multiple criteria decision methods), social justice, higher education policy, and more.

Competition and Pass-through: Evidence From the Greek Islands
Dr Christos Genakos, Cambridge Judge Business School

13:00-14:00, 24 October 2018
LT2, Cambridge Judge Business School

Abstract

Understanding how firms pass cost shocks through to prices under different competitive conditions is of fundamental importance across many fields in economics. Yet, despite theoretical advances, there is very little empirical evidence on this question. In this paper, we measure how pass-through varies with competition in isolated markets of different size. Using daily pricing data from gas stations, we study how changes in excise duty tax across petroleum products was pass-through to retail prices across different Greek islands with a different number of competitors.

Speaker bio

Dr Christos Genakos is University Senior Lecturer in Economics and Director of Studies in Management at Cambridge Judge Business School and Fellow of Fitzwilliam College. He is also an Associate Researcher at the Centre for Economic Performance (CEP) in the London School of Economics and a Research Fellow in the Industrial Organization programme of the Centre for Economic Policy Research (CEPR).

Additionally, he is a member of the Economic Advisory Group on Competition Policy (EAGCP) of the Chief Economist of the European Union's DG Competition Commission.

He has advised many leading firms on regulation, antitrust and pricing related issues and has consulted with international organisations such as the Organisation for Economic Co-operation and Development (OECD) on competition and regulation issues in various countries.

Multiproduct Intermediaries
Dr Andrew Rhodes, Toulouse School of Economics

12:30-14:00, 31 October 2018
LT2, Cambridge Judge Business School

Abstract

This paper develops a new framework for studying multiproduct intermediaries. We show that a multiproduct intermediary is profitable even when it does not improve efficiency in selling products. In its optimal product selection, it stocks high-value products exclusively to attract consumers, then profits by selling non-exclusive products which are relatively cheap to buy from upstream suppliers. However, relative to the social optimum, the intermediary tends to be too big and stock too many products exclusively. The study establishes a link between product selection and product demand features such as size, shape and elasticity. As an application of the framework, the study also looks at the impact of direct-to-consumer sales by upstream suppliers on the intermediary's product range and profitability.

Speaker bio

Andrew Rhodes is an Assistant Professor at the Toulouse School of Economics. He studied as an undergraduate at the University of Cambridge, and as a graduate at the University of Oxford. He is currently a CEPR Research Fellow (IO) and an Associate Editor of the International Journal of Industrial Organization and the Journal of Industrial Economics.

The Solar Revolution: Who Made It Happen?
Professor Felix Muesgens, Brandenburg University of Technology

12:30-14:00, 6 Nov 2018
Keynes Room, Faculty of Economics

This seminar is organised in association with the Energy Policy Research Group at the Cambridge Judge Business School.

Speaker bio

Felix Muesgens is Professor of Energy Economics at the Brandenburg University of Technology in Cottbus. His research focuses on energy markets. He holds a PhD from the Graduate School of Risk Management in Cologne. His dissertation, The Economics of Wholesale Electricity Markets, was awarded the Theodor-Wessels-Preis for distinguished energy research. Felix published numerous journal articles. He performed scientific consulting projects for the European Union, government ministries, the German Research Foundation (DFG), BDI, VGB and different German and international companies. Research projects covered a broad range from market design, trading and risk management to long-term investment and pricing signals. He has spent extended research stays at EPRG, Cambridge Judge Business School and at OIES, the University of Oxford. Felix has industry experience from working three years on Trianel’s trading floor, where he headed the electricity portfolio management department as well as from R2B Energy Consulting, a boutique energy consulting company, where he was co-founder and partner from 2009 to 2016.

Cheap Trade Credit & Competition in Downstream Markets
Dr Emanuele Tarantino, University of Mannheim

12:30-14:00, 7 Nov 2018
Fadi Boustany Lecture Theatre, Cambridge Judge Business School

Abstract

Using a unique dataset with information on 20 million inter-firm transactions, we provide evidence that suppliers offer trade credit to high-bargaining-power customers to ease competition in downstream markets in which they have a large number of other clients. Differently from price discounts, trade credit targets infra-marginal units and does not lower the marginal cost of high-bargaining-power customers. As a consequence, the latter do not gain market share and the supplier can preserve profitable sales to low-bargaining-power customers. The research shows that empirically trade credit is not monotonically increasing in past purchases, as is consistent with the conjecture that it targets infra-marginal units. In addition, the supplier grants trade credit to high bargaining-power-customers only when it fears the cannibalisation of sales to other low-bargaining-power clients.The results are not driven by differences in suppliers' ability to provide trade credit, customer-specific shocks, or endogenous location decisions.

Speaker bio

Emanuele Tarantino is an Assistant Professor in Economics at the University of Mannheim, Germany, a research affiliate of the Centre for Economic Policy Research (CEPR), and a member of the Economic Advisory Group on Competition Policy of the European Commission Chief Economist. He holds a PhD in Economics from the European University Institute (Florence) and, before joining the University of Mannheim, he was a "Franco Modigliani" Research Fellow at the University of Bologna. His research interests are in industrial and financial economics, with a particular focus on innovation, vertical relationships, and financial contracting. His papers have been published in leading journals in economics and finance, like, the Journal of Financial Economics, the Review of Financial Studies, and the RAND Journal of Economics.

Ahead of the seminar, there will be a light lunch served in the Conference Reception at 12:30.

Competitive Cross-Subsidisation
Dr Patrick Rey, Toulouse School of Economics

13:00-14:30, 14 November 2018
Room KH107, Cambridge Judge Business School

Abstract

Cross-subsidisation arises naturally when firms with different comparative advantages compete for consumers with heterogeneous shopping patterns. Firms then face a form of co-opetition, as they offer substitutes for one-stop shoppers and complements for multi-stop shoppers. When intense competition for one-stop shoppers drives total prices down to cost, firms subsidise weak products with the profit made on strong products. Firms have moreover incentives to seek comparative advantages on different products. Finally, banning below-cost pricing increases firms' profits at the expense of one-stop shoppers, which calls for a cautious use of below-cost pricing regulations in competitive markets.

Speaker bio

Patrick Rey is a Professor of Economics at the University of Toulouse and a member of the Toulouse School of Economics, as well as a research director of the Institut d’Economie Industrielle, which he previously headed. Before joining Toulouse, he led the Laboratoire d’Economie Industrielle (LEI) at CREST (INSEE, Paris), which he founded, and what is now the Ecole Nationale de la Statistique et de l’Administration Economique (ENSAE, Paris). He holds a PhD in Economics from the University of Toulouse, an engineering degree from Ecole Polytechnique, where he has also been a professor, and a statistician-economist degree from ENSAE.

His current themes of research include industrial organisation, regulation and competition policy, innovation and intellectual property. He has published numerous papers and book contributions, including more than 20 articles in international top-tier economic journals such as Econometrica, the American Economic Review, the Review of Economic Studies and the RAND Journal of Economics. He has also developed an innovative pedagogical tool using a "market game".

Patrick Rey is a fellow of the Econometric Society as well as of the European Economic Association (EEA), has been a senior member of the Institut Universitaire de France (IUF) and received a senior grant from the European Research Council (ERC); he holds a Honoris Causa doctorate degree from the Norwegian School of Economics (Bergen) and has been President of the European Association for Research in Industrial Economics (EARIE).

He is widely recognised as a leading expert in competition economics. He has testified in many antitrust cases in Europe and elsewhere, conducted numerous competition workshops and seminars, and served as expert for OECD, the World Bank, the US Department of Justice and the European Commission; he is also a member of advisory bodies attached to regulatory and competition agencies (for example, coordinating the EAGCP expert group on Article 82 for the European Commission) and was a co-founder of the Association for Competition Economics (ACE).

Welfare Effects of R&D Support Policies
Dr Otto Toivanen, Aalto University Business School

13:00-14:00, 21 November 2018
Fadi Boustany Lecture Theatre, Cambridge Judge Business School

Abstract

We conduct a welfare analysis of R&D subsidies and tax credits using a model of innovation policy incorporating externalities, limited R&D participation and financial market imperfections.

We estimate the model using R&D project level data from Finland. The optimal R&D tax credit rate (0.24) is lower than the average R&D subsidy rate (0.36).

The intensive, not the extensive margin of R&D is important for policy. Tax credits and subsidies increase R&D investments and spillovers compared to laissez-faire but to levels below the first best. R&D support policies don't improve welfare.

Speaker bio

Otto Toivanen (born 1965, Finland) obtained his PhD from University of Warwick (UK) in 1995. He is a professor in the Department of Economics at Aalto University Business School and the Director of the Helsinki Graduate School of Economics.

Before his current position he was a professor at KU Leuven. He has also been the director of HECER, a joint venture of all economics departments in Helsinki, has held positions at University of Warwick and Helsinki School of Economics, and has been a visiting scholar at MIT, NBER and University of California, Berkeley. Otto Toivanen specialises in industrial organisation and economics of innovation.

He has published his research in e.g. Review of Economics and Statistics, RAND Journal of Economics, American Economic Journal: Microeconomics, Economic Journal and American Political Science Review. He is currently an associate editor of the International Journal of Industrial Organisation and a research fellow of CEPR, Etla, MaCCI and ZEW.

He has been a member of the executive committee of the European Association for Research in Industrial Economics and an associate editor of the Journal of Industrial Economics.

He holds or has held several positions of trust, e.g. membership of the Economic Council of the Finnish Ministry of Finance, chair of the scientific council of VATT Institute of Economic Research and membership of the Economic Advisory Group for Competition Policy in DG Competition of the European Union.

He has acted as a consultant for private sector firms and for public sector agencies such as the European Commission and the Finnish government.

Previous seminars

Lent Term

Pro-Market Regulatory Reform: An Applied Method and Impact Analysis
Dr Sean Ennis, OECD Competition Division

17:00-18:30, 30 January 2018
Room W2.02, Cambridge Judge Business School

Abstract

Government regulations have the capacity to create excessive restrictions on business activity in a way that reduces competition. Policymakers need to consider whether reforms to promote competition are worthwhile and, if so, how to create such reforms. This paper outlines an operational method for reviewing regulations to identify potential restrictions on competition and develop alternative, less restrictive policies. The method presented has been used in large scales reviews of regulation in 16 sectors in 4 economies. The question remains of whether pro-competitive reforms yield substantial benefits. Based on an ex post study of pro-competitive reforms, price impacts are in many cases comparable to the elimination of cartels. One explanation could be that both private cartels and government anti-competitive regulation can equally create quantity and entry constraints that are the underlying generator of anti-competitive price impacts.

Speaker bio

Dr Sean F. Ennis is currently a Senior Economist in the Competition Division of the OECD engaged in economic analysis for competition law and policy, including consumer impacts, cartels, regulated and digital sectors and fines and damages. Previously, he was the Executive Director of the Competition Commission of Mauritius from 2011 to 2013. He leads the OECD work on competition assessment of regulations.

Before that, he served as a Senior Economist at the OECD, where he initiated and led the OECD’s competition assessment project, an international effort to develop and foster best practice for identifying and removing the anticompetitive effects of regulation. He also was responsible for OECD work on competition and reform in regulated industries in support of the OECD’s Working Party on Competition and Regulation. Prior to that, he worked as an economist at both the European Commission’s DG Competition and at the U.S. Department of Justice’s Antitrust Division, developing economic analyses for competition law investigations. Sean Ennis received a BA (Hons) in Economics from King’s College, University of Cambridge and a PhD in Economics from the University of California at Berkeley.

Face-to-Face Communication in Organisations
Dr Jordi Blanes i Vidal, London School of Economics

17:00-18:00, 6 February 2018
Room W2.02, Cambridge Judge Business School

Abstract

Jordi will present his study of how communicating in person (in addition to electronically) affects team productivity in organisations. Understanding this relation empirically has proven elusive due to measurement and endogeneity issues. The study exploits a unique natural experiment in an organisation where workers must transmit complex electronic information to their teammates. For exogenous reasons, workers can sometimes also communicate face-to-face. The results show that productivity is higher when face-to-face communication is possible, and that this effect is stronger for urgent and complex tasks, for homogeneous teams, and during high pressure conditions. Jordi highlights the opportunity costs of face-to-face communication and their dependence on organisational slack.

Speaker bio

Dr Jordi Blanes i Vidal is an Associate Professor at the Department of Management in the London School of Economics. His main research interest is the Economics of Organisations. His research interests also include the economics of crime, political economy, and law and economics.

Competition in London Local Bus Tendering
Professor Michael Waterson, University of Warwick

17:00-18:00, 20 February 2018
Room W2.01, Cambridge Judge Business School

Abstract

Under recurrent procurement, the awarding of a contract to a firm may put it in an advantageous position in future tenders, which may reduce competition over time. The paper first studies the dynamics of competition for tendered contracts, focusing on factors that may generate incumbent advantage. It then applies insights from that literature to analyse empirically the evolution of competition in the market for local bus services in London using a sample of repeated contracts for the same object.

Speaker bio

Professor Michael Waterson is Professor of Economics at the University of Warwick, where he has taught since 1991. His research lies broadly within the field of industrial economics, most recently in the areas of supermarket pricing, online sales, energy markets at wholesale and retail levels and procurement. He has published widely in a range of journals and books. He held previous academic posts at the Universities of Reading and Newcastle and has been President of the European Association for Research in Industrial Economics and Chair of the (UK) Network of Industrial Economists. He was also General Editor of the Journal of Industrial Economics for five years. Outside academia, his roles have included acting as a special advisor to a House of Lords Select Committee on two occasions and, for a period, Chair of the Utilities Appeals Panel for Guernsey. Between 2005 and 2014 he was a Member of the Competition Commission, where he worked on a number of merger cases and one market investigation. He also worked on a report for BIS/ DCMS on Secondary Ticketing, which was published in 2016. He is now a member of the Competition Appeal Tribunal.

Heterogeneous Effects of Performance Pay with Market Competition: Evidence from a Randomised Field Experiment
Professor Tobias Kretschmer, LMU Munich

17:00-18:00, 27 February 2018 
Fadi Boustany Lecture Theatre, Cambridge Judge Business School

Abstract

It is well established that the effectiveness of pay-for-performance (PfP) schemes depends on employee- and firm-specific factors. Much less is known about the role of factors outside the firm. This research investigates the role of market competition on the effectiveness of PfP. The theory posits that there are two counteracting effects, a business stealing and a competitor response effect, that jointly generate an inverted U-shape relationship between PfP effectiveness and competition. Weak competition creates low incentives to exert effort because there is little extra market to gain, while strong competition creates low incentives as competitors respond more. PfP hence has the strongest effect for moderate competition. The study tests this prediction with a field experiment on a retail chain which confirms this theory and refutes alternative explanations.

Speaker bio

Tobias Kretschmer is a Professor of Management, Director of the Institute for Strategy, Technology and Organization (ISTO), and Dean of the Munich School of Management at LMU Munich. He holds a PhD in Economics from London Business School and an MSc in Strategy from the University of St. Gallen. Prior to joining Munich, he held full-time positions at London School of Economics and INSEAD. His work focuses on strategy and organisation design in technology-intensive industries, especially platform markets and information and communication technologies. His work appeared, among others, in American Economic Review, Management Science, Information Systems Research, Strategic Management Journal, and Organization Science. He is a Research Fellow in Industrial Organization at the Centre for Economic Policy Research (London), an associate editor at Strategic Management Journal and International Journal of Industrial Organization and on the editorial boards of the Journal of Organization Design, Industry and Innovation and the Review of Network Economics. He likes to run (alone) and cook (with his family) in his spare time.

Assessing the Impact of Mobile Consolidation on Innovation and Quality
Serafino Abate, GSMA

17:30-18:30, 13 February 2018
Room KH107, Cambridge Judge Business School

Abstract

This study analyses the impact of the 2012 merger between two mobile operators in Austria - Hutchison 3G Austria and Orange - on 4G network coverage, download speeds and upload speeds. It is the first of its kind to measure the impact of a mobile merger on network quality and innovation outcomes as experienced by the consumer.

Speaker bio

Serafino Abate is Director of Competition Economics at the GSMA, where he works on economic and regulatory issues relating to the mobile sector, developing the GSMA’s position on key regulatory and competition policy issues.

Before joining the GSMA, Serafino worked in Brussels as Director of the Centre for Regulation in Europe in Brussels, an economic policy think tank. Before that, Serafino worked in competition policy at Ofcom, the UK telecom, post and media regulator, leading market reviews and policy projects on a variety of issues. He started his career working for Ovum, an independent research and advisory firm based in London, where he lead various consulting and research projects advising leading telecom and media operators around the world.

Serafino holds a BSc in Political Economy and Industrial Organisations from the Università degli Studi di Firenze and a MSc in economics from the University of Bristol.

Serafino speaks Italian (his native language), English, Spanish and French.

The Law of Large Populations: The Return of The Long-Ignored N and How It Can Affect Our 2020 Vision
Professor Xiao-Li Meng, Harvard University

17:00-18:00, 12 March 2018
Lecture Theatre 4, Cambridge Judge Business School

Abstract

For over a century now, we statisticians have successfully convinced ourselves and almost everyone else, that in statistical inference the size of the population N can be ignored, especially when it is large. Instead, we focused on the size of the sample, n, the key driving force for both the Law of Large Numbers and the Central Limit Theorem. We were thus taught that the statistical error (standard error) goes down with n, typically at the rate of 1/√n. However, all these rely on the presumption that our data have perfect quality, in the sense of being equivalent to a probabilistic sample. A largely overlooked statistical identity, a potential counterpart to the Euler identity in mathematics, reveals a Law of Large Populations (LLP), a law that we should be all afraid of. That is, once we lose control over data quality, the systematic error (bias) in the usual estimators, relative to the benchmarking standard error from simple random sampling, goes up with N at the rate of √N. The coefficient in front of √N can be viewed as a data defect index, which is the simple Pearson correlation between the reporting/recording indicator and the value reported/recorded. Because of the multiplier √N, a seemingly tiny correlation, say, 0.005, can have detrimental effect on the quality of inference. Without understanding of this LLP, “big data” can do more harm than good because of the drastically inflated precision assessment hence a gross overconfidence, setting us up to be caught by surprise when the reality unfolds, as we all experienced during the 2016 US presidential election. Data from Cooperative Congressional Election Study (CCES, conducted by Stephen Ansolabehere, Douglas River and others, and analysed by Shiro Kuriwaki), are used to estimate the data defect index for the 2016 US election, with the aim to gain a clearer vision for the 2020 US election and beyond.

Speaker bio

Xiao-Li Meng, Dean of the Harvard University Graduate School of Arts and Sciences (GSAS), Whipple V. N. Jones Professor and former chair of Statistics at Harvard, and President elect of the Institute of Mathematical Statistics, is well known for his depth and breadth in research, his innovation and passion in pedagogy, and his vision and effectiveness in administration, as well as for his engaging and entertaining style as a speaker and writer. Meng has received numerous awards and honours for the more than 150 publications he has authored in at least a dozen theoretical and methodological areas, as well as in areas of pedagogy and professional development; he has delivered more than 400 research presentations and public speeches on these topics, and he is the author of “The XL-Files," a regularly appearing column in the IMS (Institute of Mathematical Statistics) Bulletin. His interests range from the theoretical foundations of statistical inferences (for example, the interplay among Bayesian, frequentist, and fiducial perspectives; quantify ignorance via invariance principles; multi-phase and multi-resolution inferences) to statistical methods and computation (for example, posterior predictive p-value; EM algorithm; Markov chain Monte Carlo; bridge and path sampling) to applications in natural, social, and medical sciences and engineering (for example, complex statistical modelling in astronomy and astrophysics, assessing disparity in mental health services, and quantifying statistical information in genetic studies). Meng received his BS in mathematics from Fudan University in 1982 and his PhD in statistics from Harvard in 1990. He was on the faculty of the University of Chicago from 1991 to 2001 before returning to Harvard as Professor of Statistics, where he was appointed department chair in 2004 and the Whipple V. N. Jones Professor in 2007. He was appointed GSAS Dean on 15 August 2012.

Competition in a Differentiated Product Market with Individualised Pricing: The Case of the UK Brick Industry
Professor Howard Smith, Oxford University

17:00-18:00, 13 March 2018
Room W2.02, Cambridge Judge Business School

Abstract

In many competitive markets the seller sells the product at an individualised price specific to the buyer. This is a particular feature of markets where buyers preferences are well known to the sellers. This study focuses on price determination in a market where products are differentiated by geographic location as well as by product characteristics. Using a dataset of transactions from the UK brick industry, the study estimates a model with individualised prices. We analyse the effect of bargaining skill, location, and transaction size on prices. In counterfactual analysis, the research measures the welfare impact of prohibiting individualised price discrimination, and the study analyses the effects of mergers when there is individualised pricing.

Speaker bio

Howard Smith is an Associate Professor in the Department of Economics at Oxford University. He is interested in models of industry behaviour in oligopoly product markets, and their econometric estimation, with application to competition policy issues.

Michaelmas Term 2017

Internet & Politics: Evidence from UK Local Elections & Local Government Policies
Tommaso Valletti, Chief Competition Economist at the Directorate General for Competition, European Commission, and Professor of Economics at Imperial College Business School

17:45-18:45, 17 October 2017
Lecture Theatre 1, Cambridge Judge Business School

Abstract

We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the UK. Our analysis suggests that the Internet has displaced other media with greater news content (i.e. radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, we find suggestive evidence that local government expenditures and taxes are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings are consistent with the idea that voters’ information plays a key role in determining electoral participation, government policies and government size.

Speaker bio

Tommaso Valletti has a magna cum laude degree in engineering from Turin and holds a MSc and a PhD in economics from the London School of Economics. He is Professor of Economics at Imperial College Business School, and also Professor of Economics at the University of Rome "Tor Vergata" (Italy). He has previously taught at the London School of Economics, Telecom ParisTech/Ecole Polytechnique, and Turin.

Tommaso is the Director of the PhD programme at Imperial College Business School. He is currently on leave, as he has been appointed Chief Competition Economist of the European Commission (Directorate General for Competition) as of September 2016.

Tommaso’s main research interests are in industrial economics, regulation, and telecommunications economics. Tommaso has held several editorial positions (Editor of Information Economics & Policy, Associate Editor of the Journal of Industrial Economics and of Economica). He has published numerous articles in journals such as the American Economic Review, Economic Journal, Information Systems Research, Journal of the European Economic Association, Journal of Industrial Economics, Journal of International Economics, Journal of Economic Perspectives, Marketing Science, and RAND Journal of Economics.

He is a Fellow of CEPR and of ENCORE. He is a member of the panel of academic advisors to Ofcom, the UK communications regulator. He was also a member of the panel of academic advisors of the UK Competition Commission. Tommaso was Academic Director of the Centre for Regulation in Europe in Brussels, in 2012-2016. He was a board director of Consip, the Italian Public Procurement Agency, in 2002-2005. He has advised numerous bodies, including the European Commission, OECD, and the World Bank on topics such as network interconnection, mobile telephony markets, and spectrum auctions.

The Dynamics of Technology Adoption & Vertical Restraints: An Empirical Analysis
Professor Michelle Sovinsky, University of Mannheim

17:30-18:30, 24 October 2017
Lecture Theatre 2, Cambridge Judge Business School

Abstract

This paper studies the impact of vertical restraints in the x86 processor industry, where a dominant upstream supplier (Intel) competes with a smaller contender, Advanced Micro Devices (AMD). During the studied period, Intel’s strategy included a controversial program, "Intel Inside", through which it offered downstream clients rebates and subsidies that were conditioned on the volume purchased from it and, sometimes, on the volume purchased from AMD. We document the manner by which such restraints interact with the dynamic process of downstream technology adoption. Our preliminary results indicate, first, that Intel’s restraints were binding: restrictions imposed on a downstream client reduced the rate of its AMD adoption. They also illustrate the role played by dynamics and downstream clients’ expectations: we find that (i) adoption of the AMD technology by a given downstream firm was negatively affected by restrictions imposed on other downstream firms, and that (ii) adoption was an increasing function of the intensity of antitrust litigation against Intel.

Speaker bio

Michelle Sovinsky is a Professor of Economics at the University of Mannheim, a research fellow of the Center of Economic Policy Research (CEPR), an associate of the University of Chicago Becker Friedman Institute, and a research fellow of the Economics Network for Competition and Regulation. She received her PhD in Economics at the University of Virginia and has been on the faculty in the United States (at the University of Southern California) and in Europe and has held visiting professorships in the US, Europe, and Australia.

She currently serves on the executive board of European Association for Research in Industrial Economics Society (EARIE) and has served on the panel for EARIE and the European Economics Association meetings many times. She was the EARIE Scientific Program Chair in 2015. She is also a co-editor at the International Journal of Industrial Organization and on the Editoral Panel of Economic Policy.

Her research focuses on using game-theoretic modeling with empirical analysis to examine policy issues in industrial organisation and applied health. Her research covers a wide range of topics including individual-decision making under limited information and the implications for firms’ decisions and market power; and the antitrust implications of research collaboration or advertising expenditures; the analysis of decisions concerning long-term care for the elderly; and how individuals make risky decisions concerning their health, drug use, or eating behaviours.

Her research has implications for the design of public health policy and antitrust/competition policy and has been published in American Economic Review, Econometrica, the International Economic Review, and the Journal of Human Resources.

She received an ERC Consolidators Grant for the period 2017-2022 for the project "Illicit Products, Unknown Competitors, and Illegal Behavior" (FORENSICS), which the ERC supports with over 1.2 million euros.

Carbon Pricing & Firm Profits: Theory & Estimates for US Airlines
Dr Robert Ritz, University of Cambridge

17:30-18:30, 31 October 2017
Lecture Theatre 2, Cambridge Judge Business School

Abstract

We present a new model to estimate the impacts of carbon pricing on firm-level profits, and use it to analyse future climate policy for the US airline industry. Our theoretical approach nests many familiar models of imperfect competition as special cases; it shows how the rate of carbon cost pass-through is a "sufficient statistic" for the profit impact of carbon pricing. Our pass-through estimates reveal substantial heterogeneity across airlines: at a $50/tCO2 tax, the large legacy carriers experience an average profit loss of six per cent of revenue – while low-cost Southwest Airlines’ profit rises by one per cent. We think of our approach as "quasi-structural": it uses theory to identify the drivers of profit impacts and then completes their estimation using reduced-form econometrics.

Speaker bio

Dr Robert Ritz is Assistant Director of the Energy Policy Research Group (EPRG) at the University of Cambridge; a Senior Research Associate in Economics & Policy at the University of Cambridge Judge Business School, and a Fellow of Peterhouse, Cambridge.

Robert serves on the Academic Panel of the UK’s Competition & Markets Authority (CMA) and is a Principal at Vivid Economics, a London-based consultancy. Earlier in his career, he worked at the Oxford Institute for Energy Studies and McKinsey & Company; he has also been a visiting scholar at the Bank of England and MIT.

Robert’s research interests span industrial organisation, energy economics (oil & gas, electricity & carbon markets) and climate policy. His current projects are on market-based environmental policy, the economics of cost pass-through, and the design of high-renewables electricity markets.

He holds a DPhil in Economics from Nuffield College, University of Oxford, an MA in Financial Economics from the University of St Andrews, and attended the University of Pennsylvania and its Wharton School as a visiting McNeil Scholar.

Heterogenous Time Preferences & Hyperbolic Discounting: Evidence from the UK Mortgage Market
Dr Pasquale Schiraldi, London School of Economics

17:30-19:00, 7 November 2017
Lecture Theatre 2, Cambridge Judge Business School

Abstract

We estimate a dynamic discrete-continuous model of mortgage demand, in which forward-looking borrowers choose the type (for instance, interest rate type and length) and quantity of mortgages. Borrowers are assumed to have time separable utility, with quasi-hyperbolic discounting. Time preference plays an important role in understanding inter-temporal economic behaviour. Typically, time preferences are not estimated in dynamic discrete choice models except under special exclusion restrictions (Magnac Thesmar, 2002), we instead provide identification through the addition of the continuous choice over quantity borrowed. An existing literature on quasi-hyperbolic discounting focuses on continuous choices (for example, savings), to which we are able to add the demand for commitment embedded in the discrete choice over mortgage products. Our reduced-form results confirm the effect of commitment on borrowing decisions, as well as the effect of dynamic inconsistency on demand for commitment. We then use the structural model to quantify the potential welfare implications of modifying the set of products so to improve consumers’ commitment.

Speaker bio

Pasquale Schiraldi is a Lecturer of Economics at London School of Economics. His research interests are in industrial organisation, applied econometrics and microeconomic theory. His work focuses on durable goods and dynamic pricing, auctions and market design, demand estimation, consumer behaviour, and their implications on industry structure, competition and welfare. He is a faculty research fellow at the Centre for Economic Policy Research and Associate Editor at the International Journal of Industrial Organization.

Incentives & Rank Concerns in Managerial Tournaments
Dr Julia Shvets, University of Cambridge

18:00-19:30, 14 November 2017
Lecture Theatre 3, Cambridge Judge Business School

Abstract

Many firms use relative performance pay in which they rank employees. In such a setting, an employee’s actions may not only be shaped by incentives but also by concerns about their rank. This paper studies incentive and rank effects faced by store managers in a large firm where bonus is determined through a high powered tournament. The study looks at managers’ response to performance feedback, using the rules of the tournament to separate the impact of incentives from that of rank. On the margin, findings show that managers ignore incentives, but respond to rank. Their response suggests desire to catch up: when managers get a bad rank on either profit or service, they respond by improving performance. Furthermore, the study shows that managers achieve these improvements by making corresponding changes to labour variables, their main levers of control.

Speaker bio

Dr Julia Shvets is a Senior College Lecturer in Economics at Christ’s College, Cambridge and a member of Empirical Microeconomics Group at the Faculty of Economics, University of Cambridge.

Julia is a microeconomist who is interested in what drives human beings. She uses data on individual decisions to gather evidence on often hidden forces that shape people’s actions. For example, she has shown how a judge’s decisions can depend on who had appointment the judge; and how politicians’ decisions can change when the pressure to get re-elected falls. Currently, in collaboration with a large firm, Julia is studying behaviour of managers, using historical and experimental data. She lectures behavioural and experimental economics at the University of Cambridge.

Julia was born in Soviet Russia, and received her undergraduate degree from Auburn University in Alabama and a PhD from the London School of Economics and Political Science. She first came to Cambridge as a Junior Research Fellow at Corpus Christi College. She has also worked at an economic consultancy in London and New York, and in a team of policy advisors to the Russian government.

Do Tax Incentives for Research Increase Firm Innovation? An RD Design for R&D
Dr Ralf Martin, Imperial College Business School

17:30-19:00, 21 November 2017
Lecture Theatre 2, Cambridge Judge Business School

Abstract

Ralf will present evidence of a causal impact of research and development (R&D) tax incentives on innovation. The study exploits a change in the asset-based size thresholds for eligibility for R&D tax subsidies and implement a Regression Discontinuity Design using administrative tax data on the population of UK firms. There are statistically and economically significant effects of the tax change on both R&D and patenting (even when quality-adjusted). R&D tax price elasticities are large at about 2.6, probably because the treated group is from a sub-population of smaller firms and subject to financial constraints. There does not appear to be pre-policy manipulation of assets around the thresholds that could undermine our design. Over the 2006-2011 period aggregate business R&D would be around 10 per cent lower in the absence of the tax relief scheme. We also show that the R&D generated by the tax policy creates positive spillovers on the innovations of technologically related firms.

Speaker bio

Dr Ralf Martin joined Imperial College Business School in September 2011. In his research he examines how government policies affect business performance. He is particularly focusing on climate change policies, to understand which policies are most effective and efficient in reducing greenhouse gas emission and what effect these policies have on other aspects of business performance.

Easter Term 2017

The Decline of Science in Corporate R&D
Dr Andrea Patacconi, Norwich Business School

15:00-16:00, 17 May 2017
Room W2.02, Cambridge Judge Business School

Abstract

In this paper, Andrea will discuss document a shift away from science by large corporations between 1980 and 2006. Findings show that publications by company scientists have declined over time in a range of industries. Also, that the value attributable to scientific research has dropped, whereas the value attributable to technical knowledge (as measured by patents) has remained stable. These trends are unlikely to be driven exclusively by changes in publication practices. Further science continues to be useful as an input into innovation. The evidence points to a reduction of the private benefits of internal research. Large firms still value the golden eggs of science (as reflected in patents) but seem to be increasingly unwilling to invest in the golden goose itself (the scientific capabilities).

Speaker bio

Andrea Patacconi is Senior Lecturer in Strategy Norwich Business School, University of East Anglia. From 2009 to 2013, he held a position as Sixth Century Lecturer in Economics and Management at the University of Aberdeen Business School. Before that, he was a British Academy Postdoctoral Fellow at the University of Oxford. Andrea has a BA in Economics from the University of Bologna (summa cum laude) and a PhD in Economics from the University of Oxford.

Andrea’s research interests focus on organisation design, interfirm collaboration (particularly corporate groups and strategic alliances), business ecosystems, and corporate science. His work has appeared in Strategic Management Journal, Research Policy, RAND Journal of Economics and Journal of Public Economics. His recent research has been discussed in the media such as The Washington Post, The New York Times, Fortune Magazine, and policy circles including, the US Committee on Oversight and Government Reform, the UK Parliamentary and Scientific Committee.

Andrea’s research has been funded by the Fell Fund, the Technology Strategy Board and the British Academy. He teaches at both the undergraduate and postgraduate (MBA and MSc) level. Andrea enjoys working with organisations such as HP Labs and has started a small family business with his brother. In his spare time, he enjoys playing tennis and football.

Contact us

Get in touch with the Economics & Policy subject group via their Administrator, Emily Brown:

e.brown@jbs.cam.ac.uk