Benjamin Shiller

Abstract: We analyze how self-driving vehicles (SDVs) influence commuter behavior and returns to long-lived public transit investments. Using a commuting mode model estimated on detailed home and work location data from Greater Boston, we simulate the widespread entry of SDVs, which offer passive travel similar to transit but use existing road networks. We find that SDVs increase vehicle miles by 40% while decreasing public transit use by about 10%. Transit improvements continue to moderately boost revenues and lower miles driven, but their effects on mileage are small compared to SDVs. These findings highlight planning challenges posed by the emergence of SDVs.

Abstract: We investigate the impact of intentionally coarsening ratings in the context of automobile safety ratings. First, we construct a novel univariate continuous crashworthiness rating from crash test measurements and observed fatality rates. We then estimate a random coefficient model of vehicle demand under status quo coarse ratings and simulate outcomes under counterfactual continuous ratings. We find that consumers alter vehicle choices, thereby reducing fatalities by 7.4% --- implying 1850 fewer US fatalities annually. Finally, we explore whether incentives to produce crashworthy vehicles are reduced enough to offset benefits of finer information. We conclude that a continuous rating format would reduce fatalities.

Abstract: Since its founding, Amazon has established a reputation for being consumer friendly by consistently offering low prices. However, recent antitrust concerns about dominant online platforms have revived questions about whether Amazon uses its market share to exploit consumers. Using the sudden U.S. exit of Toys R Us as a natural experiment, we find that Amazon's prices increased by almost 5% in the wake of the exit, with larger increases for popular products most likely stocked by Toys R Us. Thus, despite Amazon's long-standing reputation for low prices, it may exploit increases in market power as traditional retailers cease operating.

Abstract: Concerns about anti-competitive effects of proprietary data collection have motivated recent European data portability laws. We investigate such concerns and search for evidence of direct benefits of data collection in the context of Pay How You Drive (PHYD) auto insurance, which offers tailored discounts to drivers monitored by telematics devices. We exploit the staggered entry of PHYD insurance across states and insurers in a difference-in-differences framework, and we replicate the main findings using state insurance regulations as instruments for entry timing. We find a meaningful impact of PHYD programs on fatal accidents, but we find no evidence of antitrust concerns.

Abstract: An existing theoretical literature finds that frictionless resale markets cannot reduce profits of monopolist producers of perfectly durable goods. This paper starts by presenting logical arguments suggesting this finding does not hold for goods consumers tire of with use, implying the impact of resale is an empirical question. The empirical impact is then estimated in the market for video games, one of many markets in which producers may soon legally prevent resale by distributing their products digitally as downloads or streamed rentals. Estimation proceeds in two steps. First, demand parameters are estimated using a dynamic discrete choice model in a market with allowed resale, using data on new sales and used trade-ins. Then, using these parameter estimates, prices, profits, and consumer welfare are simulated under counterfactual environments. When resale is allowed, firms are unable to prevent their goods from selling for low prices in later periods. The ability to do so by restricting resale outright yields significant profit increases. Renting, however, does not raise profits as much due to a revenue extraction problem.

Abstract: Although bundling can substantially increase profits relative to standalone pricing, particularly for zero‐marginal‐cost information products, it has one major problem: bundling produces revenue that is not readily attributable to particular pieces of intellectual property, creating a revenue division problem. We evaluate several possible solutions using unique song valuation survey data. We find the Shapley value, a well‐motivated theoretical solution, is universally incentive compatible (all bundle elements fare better inside the bundle than under standalone pricing), but revenue‐sharing schemes feasible with readily available consumption data are not. Among feasible schemes, Ginsburgh and Zang's modified Shapley value performs best.

Abstract: With digital music as its context, this paper quantifies how much money would be made using alternatives to uniform pricing. Using survey-based data on nearly 1,000 students' valuations of 100 popular songs in early 2008 and early 2009, we find that various alternatives can raise both producer and consumer surplus. Digital music revenue could be raised by between a sixth and a third relative to profit-maximizing uniform pricing. While person-specific uniform pricing can raise revenue by over 50 per cent, none of the non-discriminatory schemes raise revenue's share of surplus above 40 per cent of total surplus.