Working Papers

"Performance Evaluation and Collaboration Matching between Industry and Academic" (Revising)

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 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

With Albert Banal-Estañol, Inés Macho-Stadler, and David Pérez-Castrillo, Forthcoming, R&D Management

Abstract: We analyse if and how the characteristics of grant research panels affect the applicants’ likelihood of obtaining funding and, especially, if particular types of panels favour particular types of applicants. We use the UK’s Engineering and Physical Sciences Research Council (EPSRC) award decisions. Our main results indicate that panel members tend to favour more (or penalise 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 penalise applied-oriented applicants, and that panels with fewer female members tend to penalise teams with more female applicants.

"The Impact of Consumers’ Regret on Firms’ Decisions in a Durable Good Market," Journal of Economics, 139, 125–157, 2023

Abstract: This paper studies how the consumer's anticipated regret affects the firms' pricing decisions and profits in a duopoly market. I consider a two-period game with differentiated durable products, where an incumbent sells a basic version over two periods, and an entrant releases an improved version in period 2, of which the improved features are difficult to assess by the consumers. This ambiguity will lead to regret. This paper focuses on two types of regret: a consumer may regret purchasing in period 1 instead of purchasing in period 2 (action regret); a consumer who waited until period 2 might regret not buying in period 1 (inaction regret). The consumers can anticipate the possible regret, which will influence the consumer's decision-making. The results show that both types of anticipated regret may increase or decrease the incumbent’s profit. In contrast, action (inaction) regret always benefits (harms) the entrant. Besides, the analysis indicates that the improved version's quality may either strengthen or weaken the impact of regret. Moreover, this paper examines the robustness of the results under different setups.

"Education Choices and Job Market Characteristics" with Inés Macho-Stadler, Economics Letters, 223, 110985, 2023

Abstract:  We propose a simple three-stage model where heterogeneous schools compete via tuition fees, individuals with the ex-ante unknown ability make their education choices to (eventually) get a diploma and 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 analyze the effects of the existence of a public school or a subsidy on social welfare.