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• RefWorks (Direct export to RefWorks)

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• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

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• Reference Manager
• EndNote
• RefWorks (Direct export to RefWorks)

We document new facts about pricing technology using high-frequency data, and we examine the implications for competition. Some online retailers employ technology that allows for more frequent price changes and automated responses to price changes by rivals. Motivated by these facts, we consider a model in which firms can differ in pricing frequency and choose pricing algorithms that are a function of rivals' prices. In competitive (Markov perfect) equilibrium, the introduction of simple pricing algorithms can generate price dispersion, increase price levels, and exacerbate the price effects of mergers.

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Why do low income patients tend to go to lower quality health care providers, even when they are free? We show that differential information about provider quality is an important determinant of this disparity. Our empirical strategy exploits the temporary presence of a website that publicly displayed summary star ratings of general practitioner (GP) offices in England. Regression discontinuity estimates show that patient demand responds sharply to the information on the website, and that this response is almost entirely driven by residents of low income neighborhoods. The results are consistent with high income patients having better private information about quality. We incorporate our estimates into a structural model of demand that allows for heterogeneity in information, preferences, and consumer inertia. We find that information differences explain 24 percent of the relationship between income and GP quality and reinforce disparities in access to care.

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Index funds are one of the most common ways investors access financial markets and are perceived to be a transparent and low-cost alternative to active investment management. Despite these purported virtues of index fund investing and the introduction of new products and competitors, many funds remain expensive and fund managers appear to exercise substantial market power. Why do index funds have market power? We develop a novel quantitative dynamic model of demand for and supply of index funds. In the model, investors are subject to inertia, search frictions, and have heterogeneous preferences. These frictions on the demand side create market power for index fund managers, which fund managers can further exploit by price discriminating and charging higher expense ratios to retail investors. Our results suggest that the average expense ratios paid by retail investors are roughly 45% higher as a result of search frictions and are 40% higher as a result of inertia compared to the friction-less baseline. In our counterfactuals, we find an interaction between search frictions and inertia--inertia imposes higher (lower) costs on investors when search frictions are low (high).