Isaias (Isa) Chaves Villamizar
Job Market Candidate
Department of Economics
579 Serra Mall
Stanford, CA 94305
Bargaining with Endogenous Entry of New Traders (Job Market Paper) [Coming Soon]
I study bargaining dynamics when the original counterparties face
the endogenous entry of new traders. Time is continuous, there is
a privately informed buyer and an uninformed seller who makes offers
every instant, and they bargain while waiting for the possible
entry of another privately informed buyer who observes their interactions.
Prior to entry, the equilibrium alternates between bursts of
trade, at which the seller "drives an easy bargain" and makes an offer
that an atom of buyer types accepts instantly, and dribs and drabs
of trade, during which the seller "drives a hard bargain" and makes
smoothly declining offers that are only accepted by the (measure 0)
highest buyer type who has not already been ruled out by prior play.
Typically, there is a burst of trade at the first instant of bargaining,
followed by a long phase of dribs and drabs; to an outside observer,
parties either agree instantly, or they settle in for a long impasse. By
contrast, trade under any exogenous time-varying rate of entry happens
only in dribs and drabs. When entry is endogenous but the offers
are private (hidden from the entrant), trade must also be in dribs and drabs only.
Making offers private slows down trade for high valuation buyers and makes
them strictly worse off, and it raises prices uniformly: on histories without entry, almost every buyer type pays strictly more with private offers than with public offers.
When to Hold an Auction? (with Shota Ichihashi)
We study the optimal timing of an auction in a setting where bidders arrive and depart stochastically over time.
First, we compare the revenue-maximizing timing and welfare-maximizing timing.
We show that sellers hold auctions too late or too early whenever (censored at 0) virtual values are more or less right-skewed than values.
We connect the relative right-skewness of virtual values to the ''price elasticity of demand'' of the bidder's valuation distribution.
In particular, we show that sellers typically hold auctions inefficiently late.
Second, we prove that the use of simple timing rules (i.e., a fixed deadline chosen in advance) can lose an arbitrarily large fraction of the revenue from the optimal stopping rule.
This underscores the importance of taking timing seriously for good auction market design.
Pricing Responses to Platform Leakage: Optimal Design When Matches Are Irrevocable
I analyze a two-period model of a monopolist platform running a two-sided one-to-one matching market, where (i) agents can contract privately off the platform once they are matched (matches are irrevocable); (ii) they differ in how likely they are to want further business with a match (their durability); and (iii) one side of the market (say, the firms in a freelancing platform like UpWork/Elance-oDesk) has private information about its durability. I characterize the revenue-maximizing mechanism that a platform should use in this environment.
I show that in an environment with privately known durability, the platform not only prices out the bottom tier of firms, but it also sells two dramatically different first-period products to the firms: one ''premium'' sub-market of high durability workers, at prices that only high durability firms would be willing to pay, and an inferior ''discount'' sub-market of very low durability workers, at prices that draw the middle-range firms away from the superior product but are too high for low durability firms.
Moreover, I also explain how a model of privately known durability differs from a seemingly related Becker (1973) model of privately known taste for quality, in which the platform would just price the bottom tier of firms and workers out of the market (thus selling only one premium product).
He Who Counts Elects: Economic Elites, Political Elites, and Electoral Fraud
Economics and Politics (2015), with Leopoldo Fergusson and James A. Robinson
Indirect Rule and State Weakness in Africa: Sierra Leone in Comparative Perspective
with Daron Acemoglu, Philip Osafo-Kwaako, and James A. Robinson.
In Sebastian Edwards, Simon Johnson, and David Weil (eds.), African Successes: Sustainable Growth, University of Chicago Press, 2016.
Reinventing the Wheel: The Economic Benefits of
Wheeled Transportation in Early Colonial British
with James A. Robinson and Stanley L. Engerman.
In Emmanuel Akyeampong, Robert Bates,
Nathan Nunn and James A. Robinson (eds.), Africa's Development in Historical Perspective,
Cambridge University Press, 2014.