"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.
"The Impact of Consumers’ Regret on Firms’ Decisions in a Durable Good Market," Journal of Economics, 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.