Browsing by Author "Montero, Juan-Pablo"

Now showing 1 - 8 of 8
  • No Thumbnail Available
    Item
    A practical approach for curbing congestion and air pollution: Driving restrictions with toll and vintage exemptions
    (2021) Basso, Leonardo J.; Montero, Juan-Pablo; Sepulveda, Felipe
    Congestion and local air pollution continue to be a serious problem in many cities around the world, partly because of an increasing and ageing car fleet. Unfortunately, the use of pricing schemes for handling these externalities, such as congestion and pollution charges, still face much resistance. To cope with it, Carlos F. Daganzo advanced an ingenious hybrid scheme that supposedly leaves everybody better off: driving restrictions with toll exemptions. We extend Daganzo's idea to include vintage exemptions in an effort to also control for the pollution externality. We then test for its Pareto-improving property using Santiago as a case study. We find the latter not to hold in that low-income drivers are strictly worse off: the gain from faster car travel in days of no restriction is not enough to compensate the loss from switching to public transport in days of restriction. To make all individuals better off, the entire toll collection ought to be recycled back into the public transport system, lowering its fares and improving its quality. If so, the most ambitious hybrid restriction format -a 5-day-a-week restriction with vintage thresholds during fall and winter- reports per-year net benefits of around 1.2 billion dollars (or 0.5% of the country's GDP), 58% of which comes from lighter traffic and the remaining 42% from cleaner air.
  • No Thumbnail Available
    Item
    Monopolization with Must-Haves
    (2024) Ide, Enrique; Montero, Juan-Pablo
    An increasing number of monopolization cases have been constructed around the notion of " must-have" items: products that distributors must carry to "compete effectively." Motivated by these cases, , we consider a multiproduct setting where upstream suppliers sell their products through competing distributors offering one-stop-shopping convenience to consumers. We show the emergence of products that distributors cannot afford not to carry if their rivals do. A supplier of such products can exploit this must-have property, , along with tying and exclusivity provisions, , to monopolize adjacent, , otherwise-competitive markets. Policy interventions that ban tying or exclusivity provisions may prove ineffective or even backfire. ( JEL D43, K21, L13, L14, L42, L81) )
  • No Thumbnail Available
    Item
    On the geography of vintage-specific restrictions
    (2023) Fardella, Carlos; Barahona, Nano; Montero, Juan-Pablo; Sepulveda, Felipe
    Persistent air-pollution problems have led authorities in many cities around the world to impose limits on car use by means of vintage-specific restrictions or low-emission zones. Any vintage restriction must establish not only the cars that face a restriction but also its geographic area of application. As a result of the restriction, a fraction of restricted cars are exported outside the restricted area. Because restricted cars become cheaper, emissions in the restricted area could increase if exported cars remain too close to it. The extent to which such emissions leakage can occur crucially depends on transaction costs in the car market. We study this possibility with a model of the car market that allows for transaction costs and data from Santiago's 2017 vintage restriction. We fail to find emissions leakage, at least severe enough to undo the 2017 policy effects. Interestingly, transaction costs are shown to have a non-monotonic impact on emissions, and hence, on welfare.
  • No Thumbnail Available
    Item
    Product Lines and Price Discrimination in Markets with Information Frictions
    (2022) Fabra, Natalia; Montero, Juan-Pablo
    A well-known principle in economics is that firms differentiate their product offerings in order to relax competition. However, in this paper we show that information frictions can invalidate this principle. We build a duopolistic competition model of seconddegree price discrimination with information frictions in which (i) an equilibrium always exists with overlapping product qualities, whereas (ii) an equilibrium with nonoverlapping product qualities exists only if both information frictions and the cost of providing high quality are sufficiently small. As a consequence, reasons other than an attempt to soften competition should explain why firms in some cases carry nonoverlapping product lines.
  • No Thumbnail Available
    Item
    Technology-Neutral Versus Technology-Specific Procurement
    (2023) Fabra, Natalia; Montero, Juan-Pablo
    An imperfectly informed regulator needs to procure multiple units of some good (e.g., green energy, market liquidity, pollution reduction, land conservation) that can be produced with heterogeneous technologies at various costs. How should she optimally procure these units? Should she run technology-specific or technology-neutral auctions? Should she allow for partial separation across technologies? Should she instead post separate prices for each technology? What are the trade-offs involved? We find that one size does not fit all: the preferred instrument depends on the costs of the available technologies, their degree of substitutability, the extent of information asymmetry and the costs of public funds. We illustrate the use of our theory for policy analysis with an ex ante evaluation of Spain's recent renewable auction.
  • No Thumbnail Available
    Item
    The effect of transport policies on car use: A bundling model with applications
    (2013) Gallego, Francisco; Montero, Juan-Pablo; Salas, Christian
    Borrowing from the bundling literature, the paper presents a novel model of vertical and horizontal differentiation applied to transport decisions: households differ in their preferences for transportation modes - cars vs public transport - and in the amount of travel. Using few observables, the model is then used to interpret and compute policy costs associated to the effects of two major transport policies: the driving restriction program introduced in Mexico-City in November of 1989 and the public transport reform carried out in Santiago-Chile in February of 2007. Both policies had the unintended impact of increasing the number of cars on the road; and their associated transport costs are estimated, respectively, to be about 5% and 9% of the value of the vehicle stock at the time of implementation. (C) 2013 Elsevier B.V. All rights reserved.
  • No Thumbnail Available
    Item
    The effect of transport policies on car use: Evidence from Latin American cities
    (2013) Gallego, Francisco; Montero, Juan-Pablo; Salas, Christian
    In an effort to reduce air pollution and congestion, Latin American cities have experimented with different policies to persuade drivers to give up their cars in favor of public transport. This paper looks at two of such policies: the driving restriction program introduced in Mexico City in November of 1989-Hoy-No-Circula (HNC)-and the public transport reform carried out in Santiago in February of 2007-Transantiago (TS). Based on hourly concentration records of carbon monoxide, which comes primarily from vehicles exhaust, we find that household responses to both HNC and TS have been not only ultimately unfortunate-more cars on the road and higher pollution levels-but also remarkably similar in two important aspects: on how policy responses vary widely among income groups and on how fast households adjust their stock of vehicles, when they do. (C) 2013 Elsevier B.V. All rights reserved.
  • No Thumbnail Available
    Item
    Using List Prices to Collude or to Compete?
    (2024) Cussen, Diego; Montero, Juan-Pablo
    Collusion is deemed unlikely in wholesale markets where upstream suppliers and intermediate buyers privately negotiate discounts off list prices and sales quotas are unfeasible. However, many wholesale markets include both small and large buyers who compete in the retail market. We study the role of publicly announced list prices in this wholesale-retail setting, whether suppliers collude or compete. When suppliers collude, public announcements of list prices extend the possibility of collusion from small to large buyers (the multi-buyer contact effect). When suppliers compete, these announcements provide them with commitment to negotiate better terms with large buyers (the commitment effect).