arXiv subjects

Toomas Hinnosaar

Publications and source records attributed to Toomas Hinnosaar.

10 recordsLinked to original sources

arXiv2026

Opening Hours and Consumer Behavior: Evidence from GPS Data and Deregulation

In 2019, North Dakota repealed its Sunday closing law, which had required most non-grocery stores to close between midnight and noon. Using this policy change and consumer GPS data, we study the impact of opening hours on shopping behavior and welfare. We compare visits before and after the repeal in North Dakota and neighboring states using difference-in-differences and event-study designs. The repeal caused a large increase in Sunday morning visits, originating partly from intertemporal, store-type, and cross-border substitution. The closing law's welfare loss is equivalent to increasing the travel distance to affected stores by about 1.4 miles per consumer.

econ.GN↗

arXiv2024

Pricing Novel Goods

We study a bilateral trade problem where a principal has private information that is revealed with delay, such as a seller who does not yet know her production cost. Postponing the contracting process incurs a costly delay, while early contracting with limited information can create incentive issues, as the principal might misrepresent private information that will be revealed later. We show that the optimal mechanism can effectively address these challenges by leveraging the sequential nature of the problem. The optimal mechanism is a menu of two-part tariffs, where the variable part is determined by the principal's incentives and the fixed part by the agent's incentives. As two-part tariffs might be impractical in some applications, we also study price mechanisms. We show that the optimal price mechanism often entails trade at both the ex-ante and ex-post stages. Dynamic price mechanisms can lower the cost of delay by transacting with high-type agents early and relax the incentive constraints by postponing contracts with lower-type agents. We also generalize our analysis to costly learning and study ex-post efficiency in our context.

econ.TH↗

arXiv2024

Influencer Cartels

Social media influencers account for a growing share of marketing worldwide. We demonstrate the existence of a novel form of market failure in the advertising market: influencer cartels, where groups of influencers collude to increase their advertising revenue by inflating their engagement. Our theoretical model shows that influencer cartels can improve consumer welfare if they expand social media engagement to the target audience, or reduce welfare if they divert engagement to less relevant audiences. Drawing on the model's insights, we empirically examine influencer cartels using novel datasets and machine learning tools, and derive policy implications.

econ.GN↗

arXiv2022

The Limits of Limited Commitment

We study limited strategic leadership. A collection of subsets covering the leader's action space determines her commitment opportunities. We characterize the outcomes resulting from all possible commitment structures of this kind. If the commitment structure is an interval partition, then the leader's payoff is bounded by her Stackelberg and Cournot payoffs. Under general commitment structures the leader may obtain a payoff that is less than her lowest Cournot payoff. We apply our results to a textbook duopoly model and elicit the commitment structures leading to consumer- and producer-optimal outcomes.

econ.TH↗

arXiv2021

Optimal Sequential Contests

I study sequential contests where the efforts of earlier players may be disclosed to later players by nature or by design. The model has a range of applications, including rent seeking, R&D, oligopoly, public goods provision, and tragedy of the commons. I show that information about other players' efforts increases the total effort. Thus, the total effort is maximized with full transparency and minimized with no transparency. I also show that in addition to the first-mover advantage, there is an earlier-mover advantage. Finally, I derive the limits for large contests.

cs.GT↗

arXiv2020

Robust Pricing with Refunds

Before purchase, a buyer of an experience good learns about the product's fit using various information sources, including some of which the seller may be unaware of. The buyer, however, can conclusively learn the fit only after purchasing and trying out the product. We show that the seller can use a simple mechanism to best take advantage of the buyer's post-purchase learning to maximize his guaranteed-profit. We show that this mechanism combines a generous refund, which performs well when the buyer is relatively informed, with non-refundable random discounts, which work well when the buyer is relatively uninformed.

cs.GT↗

arXiv2019

Contest Architecture with Public Disclosures

I study optimal disclosure policies in sequential contests. A contest designer chooses at which periods to publicly disclose the efforts of previous contestants. I provide results for a wide range of possible objectives for the contest designer. While different objectives involve different trade-offs, I show that under many circumstances the optimal contest is one of the three basic contest structures widely studied in the literature: simultaneous, first-mover, or sequential contest.

econ.TH↗

arXiv2019

Price Setting on a Network

Most products are produced and sold by supply chain networks, where an interconnected network of producers and intermediaries set prices to maximize their profits. I show that there exists a unique equilibrium in a price-setting game on a network. The key distortion reducing both total profits and social welfare is multiple-marginalization, which is magnified by strategic interactions. Individual profits are proportional to influentiality, which is a new measure of network centrality defined by the equilibrium characterization. The results emphasize the importance of the network structure when considering policy questions such as mergers or trade tariffs.

cs.GT↗

arXiv2019

Stackelberg Independence

The standard model of sequential capacity choices is the Stackelberg quantity leadership model with linear demand. I show that under the standard assumptions, leaders' actions are informative about market conditions and independent of leaders' beliefs about the arrivals of followers. However, this Stackelberg independence property relies on all standard assumptions being satisfied. It fails to hold whenever the demand function is non-linear, marginal cost is not constant, goods are differentiated, firms are non-identical, or there are any externalities. I show that small deviations from the linear demand assumption may make the leaders' choices completely uninformative.

cs.GT↗

arXiv2019

Externalities in Knowledge Production: Evidence from a Randomized Field Experiment

Are there positive or negative externalities in knowledge production? Do current contributions to knowledge production increase or decrease the future growth of knowledge? We use a randomized field experiment, which added relevant content to some pages in Wikipedia while leaving similar pages unchanged. We find that the addition of content has a negligible impact on the subsequent long-run growth of content. Our results have implications for information seeding and incentivizing contributions, implying that additional content does not generate sizable externalities by inspiring nor discouraging future contributions.

econ.GN↗