Working Papers

"Performance Evaluation and Collaboration Matching between Industry and Academic" (Job Market Paper)


Abstract: I study the collaboration between high-tech companies and academics using a theoretical two-sided matching model with moral hazard. I take the pharma-academic alliances as one particular example. The academic's effort determines the future probability of success. This outcome is not contractual. In an interim stage, the company receives a signal on the prospects of the output. This signal allows the company to decide whether to abandon the project and is used to motivate the academic. The equilibrium consists of a menu of incentive contracts and matching between firms and academics. Considering different evaluation technologies, I show that the equilibrium matching is unique and can be positive assortative (PAM) or negative assortative (NAM) depending on the firms' evaluation technology. Moreover, when considering the matching market, a better academic's payment could be lower because she is matched with a lower-paid company, and motivating her to exert a sufficient effort does not require a higher payoff. I also discuss the results in different setups.

"Similar-to-me Effects in the Grant Application Process: Applicants, Panelists, and the Likelihood of Obtaining Funds"

R&R R&D Management

Joint with Albert Banal-Estañol, Inés Macho-Stadler, and David Pérez-Castrillo


Abstract: We analyze if and how the characteristics of grant research panels affect the applicants’ likelihood of obtaining funding and, especially, if particular types of panels favor particular types of applicants. We use the award decisions of the UK’s Engineering and Physical Sciences Research Council (EPSRC). We show that not only the applicants' but also the panels' characteristics matter. Panels of higher quality, in terms of prior research performance, for instance, as well panels that include more female members or members of Asian origin, are tougher than others. Our main results indicate that panel members tend to favor more (or penalize less) applicants with similar characteristics to them, as the similar-to-me hypothesis suggests. We show, for instance, that the quality of the applicants is more critical for panels of high quality than for panels of relatively lower quality, that basic-oriented panels tend to penalize applied-oriented applicants, and that panels with fewer female members tend to penalize teams with more female applicants.

"The Impact of Consumers’ Regret on Firms’ Decisions in a Durable Good Market"


Abstract: This paper studies how consumers' anticipation of regret affects firms' pricing decisions and profits in a duopoly market. I consider a two-period game with differentiated products, where the incumbent sells its basic version over two periods, and the entrant releases an improved version in the second period, of which the valuation is difficult to assess by consumers. This ambiguity will lead to regret. With the durability setup, this paper analyzes in which period the incumbent can benefit more when the consumer's regret exists and provide profitable strategies for firms to increase profits. The analysis shows the incumbent's overall profit may increase, decrease, or have a U-shape as a function of the regret level. This is because the effect of regret on the profit in different periods is the opposite, and the dominant period is determined by the quality of the entrant's goods, which causes various influences on the incumbent's profit. The regret always benefits or harms the entrant; in other words, anticipated regret has a monotonic effect on the entrant's profit. Moreover, this paper shows the quality of the entrant's goods may either strengthen or weaken the impact of regret on both firms' profits. Additionally, I examine the findings' robustness under different circumstances.

Work in Progress

"Education Choices and Job Market Characteristics"

Joint with Inés Macho-Stadler

Abstract: We propose a simple three-stage model where heterogeneous schools compete via tuition fees, individuals with the ex-ante unknown innate ability make their education choices to reveal their ability, and finally the job market determines the assignment of workers to firms and the equilibrium wages. In equilibrium, wages in the labor market and schools’ fees, and individuals’ school choices are strongly related. We also analyse the government’s incentives to subsidize schools to increase social welfare.