Research

Work in Progress

Effects of Concentration in Automobile Franchising

While it is widely argued that franchising is an inefficient retail model for automotive sales, little attention has been paid to the increasing concentration among franchise car dealerships. Large, privately and publicly funded groups increasingly hold portfolios of many dealerships, and the pricing and welfare consequences for joint ownership in such a heavily regulated industry are unclear. Using data on new vhicle sales in Texas, on dealership acquisitions, entry and exit, and on joint ownership of legal entities, I am able to construct the historical arc of dealer acquisitions over time. I use reduced-form methods to conduct merger retrospectives and assess the competitive impact of these transactions. I use structural methods to estimate the size of dealer price markups over wholesale and evaluate both how consolidation and how relaxing regulatory constraints would affect markups.

Opinion Pieces

The AI Black Box: Separating the Enforceable from the Unknown in Algorithmic Pricing