Three Essays in Industrial Organization

This thesis contains three papers that empirically examine firm competition and market regulation in oligopoly settings. Chapter 1 looks at the effects of consumer search costs on entry, product design, and quality in online markets. Using data from the Google Play mobile app store, I take advantage of a natural experiment that reduced search costs for one product type (game apps) in early 2014. DiD estimates show that entry increased by 33$\%$ relative to the control group (non-games), primarily by ``niche" products. These estimates also show that the quality of new entrants fell. To separate out the different welfare effects of this change, I develop and estimate a structural model of demand and supply. I show that there are large welfare gains from reduced search costs, smaller gains from increased product variety, and very small losses from lower product quality. Chapter 2 (joint with Scott Orr and Jean-William P. Lalibert\'e) examines merger analysis in markets where products are demand complements. Standard discrete choice models assume that product varieties are substitutes. These models will overstate consumer harm in merger cases with complements. We use consumer level data to look at products with natural demand complementarity - chips and soda. We estimate a discrete choice model that allows for demand complementarity and simulate a merger between PepsiCo/Frito-Lay and Dr. Pepper. Our model predicts that pop prices either increase or fall in this merger. By contrast, the standard model predicts that pop prices would always increase. Chapter 3 (joint with Victor Aguirregabiria and Junichi Suzuki) studies the impact of competition in the Ontario wine retail market. The wine retail market of Ontario is characterized by the coexistence of the government-owned LCBO and two private companies. These private firms are restricted in their locations and their product variety. We estimate a spatial demand model using a unique dataset from the LCBO. We then simulate the effects of deregulation proposals (relative to a LCBO monopoly). We show that entry of additional competitors increases consumer welfare and consumption. Expanding the product range of existing competitors also increases consumer welfare, but keeps consumption stable.Ph.D