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Ben Klopack
Job Market Candidate
Stanford University
Department of Economics
579 Serra Mall
Stanford, CA 94305
760-419-2832
bklopack@stanford.edu
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Research
One Size Fits All? The Value of Standardized Retail Chains (Job Market Paper)
Multi-outlet firms, or chains, make up a large and growing part of the US retail sector, with significant variation across store category and geographic location. This paper is focused on the chains' primary demand-side tradeoff: various forms of economies of scale allow chains to generate higher demand than independent firms, but at the same time chains are less flexible in customizing product selection or prices across locations. To quantitatively assess this tradeoff, I develop a simple model and estimate it using a large transaction-level dataset from a major payment card company, focusing on restaurant purchases. I find that on average chains could earn 22% higher revenue if they could customize their product optimally to local tastes, but they would lose 12% of their revenues if they were to operate as unconstrained independents. Policies that ban chain restaurants would result in a loss of consumer welfare equivalent to about 2% of restaurant spending and would disproportionately impact lower income consumers. Considering the endogenous entry of independent restaurants dampens the effects of chain bans by 40%.
[Appendix]
Assessing the Gains from E-Commerce (with Paul Dolfen, Liran Einav, Pete Klenow, Jon Levin, Larry Levin, Wayne Best)
E-commerce represents a rapidly growing share of U.S. retail spending. We use transactions-level data on credit and debit cards from Visa, Inc. between 2007 and 2017 to quantify the resulting consumer surplus. We estimate that the gains from e-commerce reached the equivalent of a 1.3% permanent boost to consumption by 2014, or about $1,250 per household. The gains arose mostly from accessing a wider variety of merchants online, but also from saving the travel costs of buying items in brick-and-mortar stores. The richest counties gained roughly twice as much as the poorest counties (top vs. bottom quartiles), and densely populated counties gained more than sparsely populated counties.
Strategic Default, Loan Modification, and Foreclosure (with Nicola Pierri)
The residential mortgage market is characterized by strategic interactions between borrowers, who post houses as collateral, and lenders. Our paper follows the previous literature in describing and detecting the strategic responses of borrowers to negative equity, threat of foreclosure and the potential to renegotiate their mortgage (modification). We exploit a discontinuity in the criteria for eligibility of the biggest US governmental program to encourage modifications in order to quantify the effect of these strategic responses. We show that the program succeeds in decreasing the intensity of foreclosure among delinquent borrowers and increasing the likelihood that delinquent borrowers return to making payments. However, it also significantly increases borrowers' rates of delinquency. We estimate this second effect to be strong enough to substantially weaken the policy's effectiveness in decreasing the total amount of foreclosures.
Vertical Contracting and Price Parity Agreements: Evidence from Hotels in Europe (with Nicola Pierri)
This paper investigates the effect of ''price parity'' clauses in vertical contracts between hotels and online travel agencies on average prices. These restrictions require a hotel to set its lowest prices for a given room on a travel agency's website and have come under recent scrutiny by antitrust regulators. We exploit two recent policy changes in Europe: a settlement in 2014 in Germany that banned price parity clauses by the largest online travel agency and subsequent regulatory action in 2015 in Sweden, Italy, and France. Using a differences-in-differences strategy, we find that these regulatory actions were associated with a decrease in prices of between 9% and 15%.
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