My research interest lies in Industrial Organisation and Microeconomic Theory.

Industrial Organisation I am interested in examining the effects of various food retail policies in the current inflationary environment and how market concentration changes the effect of such policies.

I am using GfK panel data to examine the effect of food price controls introduced in Hungary in February 2022. My research approach encompasses both reduced form and structural analysis techniques. 

While price caps were likely introduced to reduce the effects of the supply chain distractions caused by Covid, they became strongly binding after the War on Ukraine broke out in neighbouring Ukraine and yearly food price inflation has risen to above 40% in Hungary.

Price caps and retail taxes have been used in many countries and sectors. The theoretical literature has identified a number of possible adverse impacts on consumers. One is the potential that price caps imply a reduction in supply, with goods being allocated inefficiently between buyers (see Bulow and Klemperer (2012). In oligopoly markets, where markups are positive because of market power (either on the buyer or seller side), it is possible that price caps increase supply, which improves consumer welfare. There is a lack of empirical literature on the effects of price caps in the context of monopsony and monopoly power. The older empirical literature has tended to focus on reductions in supply and whether goods are allocated randomly to consumers (Glaeser and Luttmer (2003)). Benzarti et al (2022) consider a price control scheme for groceries in Argentina using reduced form analysis and find that supply reductions are not caused by price caps. The research I propose differs from these empirical papers by analysing price caps in an oligopoly context, using a structural model of market equilibrium, in which both a demand and supply side to the market are estimated, and which allows us to calculate the welfare benefits of counterfactual changes to the price cap policy. I also aim to analyse the distributional effects between different types of consumers and different types of retailers.

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