H. Tai Lam

I am a PhD Candidate in Economics at Northwestern University. My research interests are in Industrial Organization, including consumer search, platform design, demand estimation, market power and antitrust.

Email: tai.lam@u.northwestern.edu
Department of Economics
Northwestern University
2211 Campus Drive
Evanston, IL 60208

Education

Ph.D., Economics, Northwestern University, 2022 (expected)
B.A., Economics (Honours), University of New South Wales, Australia, 2011

Primary Field: Industrial Organization
Secondary Field:
Applied Microeconomics

CV: link

Job Market Paper

"Platform Search Design and Market Power"

Amazon.com is a marketplace where both Amazon and small businesses compete in offering retail products. However, Amazon chooses what products consumers see when they search. Products sold by Amazon may be advantageously positioned compared to small business products, but the effects on consumers and sellers are unclear. Policymakers have expressed antitrust concerns about this, suspecting “self-preferencing” and “gatekeeper” market power. To study this, I develop a model where heterogeneous consumers search over product arrangements and firms price in response—highlighting how search design determines market structure. My model endogenizes consideration set formation and is compatible with popular demand estimation techniques. Estimated on Amazon data, I show that not accounting for product arrangement (e.g., search results and BuyBox) leads to biased estimates. I pose three counterfactual product arrangements to shed light on market power and antitrust policy. (1) To isolate the effect of Amazon’s position advantage, I remove it through a “neutral arrangement”. Profits shift from Amazon to small businesses, confirming Amazon’s sizable market power. However, consumer welfare falls, which suggests Amazon’s incentives and consumers’ preferences are aligned, weakening the claim of self-preferencing. (2) The proposed ban on the platform owner from also being a seller materially reduces consumer welfare. (3) I propose an alternate policy, splitting the platform into an Amazon side and a small-business side. Giving consumers a choice to “support small businesses” would alleviate the market power imbalance without harming consumer welfare.

Work in Progress

"Separating Equilibrium in Platforms Competing Over Search Design"

Competing retail platforms (such as Amazon and eBay) choose different ways of arranging the products shown to consumers. Why does this occur, and is there an optimal arrangement of products? I propose a model of consumer search over to model a retail platform’s incentives to arrange products. I show that a monopoly platform may obfuscate search in equilibrium, using product arrangement to extract surplus from participants. However, under competing duopoly platforms, I show that pooling and separating equilibria are possible. In particular, there is a separating equilibrium where one platform groups similar products under intense price competition and the other platform does not, mirroring the observed search designs of Amazon and eBay. Search design is used to discriminate between consumers with different search costs. High search cost consumers prefer the platform that groups products as this minimizes searching, while low search cost consumers prefer the other platform since they can benefit from considering a wider range of products. The resulting pricing on each platform exhibits different dispersion that supports the separating equilibrium.

References

Prof. Robert Porter (Committee Chair)

Prof. Mar Reguant

Prof. Gaston Illanes

Prof. Vivek Bhattacharya