3rd UTMD Conference: Market Design and Empirics

Workshop Information

Pacific Time Eastern Time British Time Central European Time Japan Time
March 14, 2022 4:55 pm March 14, 2022 7:55 pm March 14, 2022 11:55 pm March 15, 2022 0:55 am March 15, 2022 8:55 am

Venue: Zoom online
Language: English
How to join: Please use the following link for registration.
Registration link
*The same meeting URL can be used for UTMD seminar series.
Format: Each talk is 1 hour: the speaker has 50 minutes, which is followed by a 10-minute general audience discussion.



*All times shown below are Japan time.

8:55-9:00 Opening remarks

Who Benefits from Surge Pricing?
Juan Camilo Castillo
University of Pennsylvania

In the last decade, new technologies have led to a boom in real-time pricing. I analyze the most salient example, surge pricing in ride hailing. Using data from Uber, I develop an empirical model of spatial equilibrium to measure the welfare effects of surge pricing. The model is composed of demand, supply, and a matching technology. It allows for temporal and spatial heterogeneity as well as randomness in supply and demand. I find that, relative to a counterfactual with uniform pricing, surge pricing increases total welfare by 1.59% of gross revenue. Welfare effects differ substantially across sides of the market: rider surplus increases by 5.25% of gross revenue, whereas driver surplus and platform profits decrease by 1.81% and 1.77% of gross revenue, respectively. Riders at all income levels benefit, while disparities in driver surplus are magnified.


Detection of Collusive Networks in E-Procurement
Leon A. Musolff
Princeton University

Collusion between government suppliers likely has significant adverse welfare effects. In this paper, we study an e-procurement market in Ukraine. After motivating our interest by documenting suspicious bidding patterns in our data, we build a model of competitive equilibrium. Frequently, we observe bids that are inconsistent with this equilibrium. In particular, when initial bids are close, suppliers should have similar costs and usually be willing to undercut each other if allowed to update their bids. To the extent that firms only engage in the predicted amount of undercutting when facing some opponents (but not when facing others), we conclude that these firms are part of a collusive ring. Finally, we successfully validate the soundness of this novel structural test of collusion on a sample of 863 prosecuted collusive firms that participated in 23,515 tenders.


The Value of Privacy in Cartels: An Analysis of the Inner Workings of a Bidding Ring
Kei Kawai
University of California, Berkeley

We study the incentives of firms in a bidding cartel that allocates contracts via rotation. We show that a cartel can attain higher payoffs by having the preselected winner randomize its bid and keep it secret from other members when defection is a concern. Intuitively, randomization makes defection less attractive as potential defectors risk not winning the auction even if they deviate. We illustrate how our theoretical predictions are borne out in practice by studying a bidding cartel that operated in Kumatori, Japan. Our case study offers a concrete instance in which randomization is used to relax incentive compatibility constraints. Our calibration of the model to the bid data of the cartel suggests that cartel profits increase by about 56% by randomization.

12:20- Closing remarks




– Please join via the link 5 minutes before the session starts.
– This workshop will be held in English only, no interpreter available.

– Please show your full name when you participate.
– Please mute your microphone during speaker’s talk except for Q&A session.
– No taking pictures, recording audio and video.
– This workshop will be recorded for the purpose of posting on our report/website. The name and faces of the participants may be displayed in the recording.

Contact info

The University of Tokyo Market Design Center(UTMD)
Graduate School of Economics, the University of Tokyo
E-mail: market-design@e.u-tokyo.ac.jp
Phone: (+81)3-5841-3441

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