Publications (English-language Journals)

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Regional Science Policy & Practice  15(2), 2023, p.  256-288

Joint with Juliana Lucena do Nascimento. 

 New Zealand Economic Papers , 51(2), 2017, pp. 148-176.

Special Issue on Advances in Competition Policy and Regulation. Guest Editors: Simona Fabrizi, Steffen Lippert and John Panzar.

Emerging Markets Finance and Trade,  51(sup6), pp. S1–S2, 2015.

Joint with José Angelo Divino, Wilfredo Maldonado and Benjamin Tabak.

Games and Economic Behavior,  82,  2013, pp. 103-131. 

Joint with Jose A. Rodrigues-Neto.

Original Title, in Portuguese:

Como Deflacionar a Arrecadação Federal? Uma Proposta de um Índice de Preços para os Tributos

Cadernos de Finanças Públicas, 23(1), 2023.

Joint with Hébrida Verardo Moreira Fam, Fausto José Araujo Vieira, and Elder Linton Alves de Araújo.

Original Title, in Portuguese:

Empresas Apoiadas por Fundos de PE/VC têm desempenho superior após seus IPOs?

Revista Razão Contábil e Finanças, 12 (2), 2021.

Joint with Amanda Holanda Santos da Cunha.

Original Title, in Portuguese:

O novo código brasileiro de proteção à propriedade industrial e seu impacto nos investimentos em P&D

Revista Brasileira de Economia de Empresas, 15(2), 2016.

Joint with Rogério Galvão de Carvalho

Original Title, in Portuguese:

Bens de status: características, literatura e novos avanços

Revista Brasileira de Economia de Empresas, 8(1), 2008.

Joint with José A. Rodrigues-Neto and Luciana C. Fiorini.

Original Title, in Portuguese:

Independência do Banco Central

Revista Brasileira de Economia de Empresas, 7(2), 2007.

Joint with José A. Rodrigues-Neto.

The present study introduces a model of social norms as the result of intergenerational conflict in the context of economic growth with social status concerns à la Cole et al. (1992). We extend this paper's framework to include endogenous social norm choosing, where males and females play, at every stage, a coordination game to choose a social norm for the matching process. We extend this model to allow for individuals of a particular generation to choose to tax all conspicuous bequests. In a two-generation model, parents will choose this taxation policy to enforce an aristocratic social norm. Kids instead would prefer a wealth-is-status social norm. In an infinite-generations model, several different equilibrium paths are possible given parameter values. In particular, the conjecture made by Hirsch (1976) that voters would start with a wealth-is-status social norm and, as the economy grows, a generation would switch to the aristocratic social norm and vote in favor of taxing conspicuous bequests is possible for a particular combination of parameter values.

Joint with Emilson Silva

Increasingly, households are being encouraged to become prosumers who also produce and sell energy to the grid, which has been profusely studied in the literature. In recent years, several large industrial consumers of energy have also found it profitable to become prosumers. Unlike household prosumers, these large prosumers do not enter the market as price takers and are competitors with market power to generators/retailers. This paper develops a model of such an industry arrangement. In our model, two generators/retailers invest in production capacity of energy, then negotiate with a large prosumer a contract for the supply of energy in a Nash Bargaining setup. This large prosumer not only consumes energy to produce its final product but also resells locally produced unused energy in the retail market to household consumers. The generator/retailers and the large prosumer then compete for the supply of household consumers in quantity, where the two generator/retailers compete Cournot-style between themselves, while being Stackelberg leaders to the large prosumer, who assumes the role of a Stackelberg follower in this market. This arrangement introduces strategic externalities in the market that lead to inefficiencies, increasing the price of wholesale energy to above marginal cost. The appropriate contract arrangements need to be made to internalize those externalities.

Joint with Emilson Silva

Increasingly, large industrial consumers of energy find profitable to become prosumers. These large prosumers are not price takers, and compete against generator/retailers with market power. Moreover, a hydropower-dominated industry is subject to weather-related risk, which affects the firms' relative market power. This paper develops a model of this industry. Two hydro generator/retailers have exogenously-given reservoirs that can be full or empty, in which case they switch to thermo. They engage in Nash Bargaining with a large consumer negotiating a contract of energy supply in a scenario that the large prosumer not only consumes energy in manufacturing, but also sells the energy it produces in retail markets. The players' outside option is Bertrand-style price competition. In retail, firms compete in quantity. The two generator/retailers are Cournot competitors to one another, and Stackelberg leaders to the large prosumer, the Stackelberg follower. These strategic externalities lead to increased wholesale energy prices to that are above marginal cost and above their counterparts in markets with no prosumers. Relative market power favors the generator/retailer that has a full reservoir when only one reservoir is full, and the large prosumer in all other contingencies. The two generator/retailers can contract with each other mutual insurance against the state of nature in which they have an empty reservoir and their rival a full reservoir, obtaining the highest profits in one-full/one-empty states of nature.

Joint with Emilson Silva

In recent years, several large industrial consumers of energy have become or considered becoming prosumers. Unlike household prosumers, these large prosumers are competitors with market power to incumbent generators/retailers. Moreover, externalities and economies of scope might exist between the production of electricity and the firm's main activity. This paper develops a model of such an market structure. In our model, two generators/retailers invest in production capacity of energy, then negotiate with a large prosumer a contract for the supply of energy in a Nash Bargaining setup. This large prosumer consumes energy to produce its final product but also resells locally produced unused energy in the retail market. There are positive externalities between electricity and final product production. The generator/retailers and the large prosumer then compete for the supply of household consumers in quantity, where the two generator/retailers compete Cournot-style between themselves, while being Stackelberg leaders to the large prosumer, who assumes the role of a Stackelberg follower in this market. We find that the wholesale price of energy is a function of as a function of the firms' marginal costs, factor substitution, and gentailers' relative bargaining power, as well as the type of outside option available (Bertrand competition or "deny service"), and the level of externalities between energy production and a final good production. Purchasing energy production not only allows the large prosumer to sell energy in the retail market for a profit but also provides the large prosumer with leverage in negotiating with gentailers in wholesale. Thus, the large prosumer invests in building capacity whenever the sum of these two sources of value surpasses the cost of building capacity. This value is larger the larger is the positive externality between the energy and final product activities within the large prosumer.

 Joint with Joanna Poyago-Theotoky and José A. Rodrigues-Neto

In a mixed duopoly with horizontal product differentiation, a partially privatised firm produces a regular good and a private firm produces a status good with the status benefit to the consumers depending on the good’s exclusivity. If both firms are managed with the same efficiency, social welfare is maximized when the degree

of privatization is zero. However, if the public firm’s management is less efficient than private management, then the welfare-maximizing industry configuration can have either full or partial privatization, but never full nationalization.

Joint with Jaideep Shenoy and Sheri Tice

Prior research shows that firms with higher industry-adjusted debt tend to lose market share to their rivals and are forced to retrench during periods of negative shocks, even if they are efficient.  We examine the economic magnitude of this effect on stock returns by using recessions as a negative exogenous shock. Firms with high debt levels relative to their industry peers experience economically and statistically significant negative abnormal returns during recessions after controlling for their CAPM beta. This effect is stronger in industries with low product differentiation, where the real competitive effects of debt are expected to be more pronounced. Moreover, debt-induced market share losses are a significant determinant of stock returns in low product differentiation industries. A series of tests rules out alternative explanations for our results such as debt overhang and mechanical leverage effects. Our findings imply that CFOs and investment bankers should consider the competitive effects of debt on stock performance when making capital structure decisions. 

Joint with Carlos A. T. Haraguchi

We present a model of bank credit in which the risk profile of a project affects a bank's lending decision and the loan's interest rate. Entrepreneurs seek to finance risky and safe projects by borrowing from a monopolistic bank, or entrepreneurs can obtain financing from sophisticated investors. Good risky projects advance while bad risky projects default. The bank cannot observe the type of the borrower, but decides whether to lend and at what interest rate. Three possible equilibria can emerge: (i) no loans are made, and interest rates are so high all types default; (ii) interest rates extract full surplus from good risky projects, and all other types default; (iii) interest rates extract full surplus from safe projects, and only bad risky projects default. When considering the resulting comparative statics in the context of innovation, our results imply that good innovative projects might be abandoned due to adverse selection issues in bank financing. The purpose of developing the present model is to take it subsequently to the data for empirical analysis in a structural setup.