Working Paper

  1. “Dynamic Incentives and Permit Market Equilibrium in Cap-and-Trade Regulation“, December 2019, Revision Requested at American Economic Journal: Microeconomics
    • Abstract
      While the cap-and-trade program was originally proposed as a static regulation, its implementation introduces dynamic incentives such as saving (banking) of emissions permits. I examine the performance of the program by accounting for dynamic regulatory design and firms’ incentives in the context of the US Acid Rain Program. I develop and estimate a dynamic equilibrium model of abatement investment and permit trading and banking, subject to transaction costs. Simulations reveal that although permit banking improves the cost-efficiency, the aggregate level of banking is excess due to transaction costs. Distribution of emissions would be more dispersed in the first best.
    • Previous version “Incentives to Invest, Storable Permits, and Transaction Costs in Market-Based Environmental Regulation” received the Young Economists’ Essay Award and 13th Paul Geroski prize for the most significant policy contribution at EARIE 2018 (Link)


  1. “Voter Turnout and Preference Aggregation“, August 2019 (with Kei Kawai and Yasutora Watanabe), Forthcoming at American Economic Journal: Microeconomics.
    • Final manuscript
    • Abstract
      We study how voter turnout affects the aggregation of preferences in elections. Under voluntary voting, election outcomes disproportionately aggregate the preferences of voters with low voting cost and high preference intensity. We show identification of the correlation structure among preferences, costs, and perceptions of voting efficacy, and explore how the correlation affects preference aggregation. Using 2004 U.S. presidential election data, we find that young, low-income, less-educated, and minority voters are underrepresented. All of these groups tend to prefer Democrats, except for the less-educated. Democrats would have won the majority of the electoral votes if all eligible voters had turned out.
  2. “The Effects of Domestic Mergers on Exports: A Case Study of the 1998 Korean Automobile Industry“, July 2017 (with Hiroshi Ohashi) Journal of International Economics, Volume 107, pp. 147–164
    • Abstract
      This paper examines the economic consequences of a horizontal merger between Korean automakers that took place in 1998, with a particular emphasis on export market behavior. Estimates of structural demand and supply reveal that the merger enhanced production efficiency of the merged party by 3.8%. Simulations, based on these estimates, indicate that while the merger increased domestic prices, the export volume of the merged party was more than doubled. Moreover, the effects of the merger are found to differ by auto model according to the model's pre-merger export status. It is shown that efficiency gains from the merger are likely to increase export volumes for models that were already exported prior to the merger, and to offset domestic market power for those that were not exported even after the merger. Finally, the paper compares the actual merger's effects to those of alternative counterfactual mergers, finding that the actual merger brought greater benefits to producers and fewer to domestic consumers.
    • Featured in “Introduction to Industrial Organization 2nd Edition” by Luis Cabral (Box 11.1 in page 284)
    • Received Miyazawa Kenichi Memorial Prize by Japan Fair Trade Institute (Link in Japanese)

Selected Work-in-Progress

  1. “Energy-augmenting Productivity and Energy Prices: Evidence from Production Microdata,” March 2020 (with Arlan Brucal)
  2. “Differentiated Products Demand with Nonparametric Income Effect and Shape Restriction,” May 2018