Research
Reference Pricing and Consumption Inequality
Fall 2025.
Abstract: Digital trade has grown rapidly and now accounts for a large share of global commerce, yet digital goods continue to exhibit systematic cross-country price dispersion unexplained by standard mechanisms such as trade costs, wages, or product differentiation. This paper shows that firms strategically use imperfect geo-blocking to price discriminate, maintaining higher prices in wealthy markets while allowing price-sensitive consumers to access cheaper foreign prices. I document this mechanism using novel data from the global video game market that combine cross-country price and quantity information with text data on enforcement and arbitrage activity. I develop a dynamic model in which heterogeneous consumers choose purchase locations and firms optimally set prices and enforcement strategies. Estimating the model by inverting the firm’s pricing problem allows me to assess welfare and distributional effects. Counterfactuals comparing prices under segmented, unified, and partially porous digital regimes reveal that partial integration benefits price-sensitive consumers in rich countries while disadvantaging consumers in poorer markets, highlighting trade-offs in digital market unification policies.
The Cost of Port Disruptions: Evidence from U.S. Containerized Trade (with Lautaro Chittaro, Stephen Redding, and Shoshana Vasserman)
Abstract: How costly are disruptions to activity at U.S. ports? To answer this question, we estimate a model of demand for importers of different types of products who choose which maritime port (if any) to use for their container imports. Our estimator leverages a nearly comprehensive panel of maritime imports to the U.S. between 2020 and 2025, linking customs records, granular GPS pings from container-shipping fleets, origin-destination-level shipping prices, and a number of additional data sources. Using variation in prices and processing times from localized slowdowns and disruptions at different ports, our model rationalizes importers’ port choices as a function of daily origin-destination prices, travel time at sea and on land, port congestion, and sticky product-origin-destination preferences at the time of each shipment’s observed departure. Our estimates allow us to predict the economic incidence of a short-term disruption at a subset of ports, such as a general strike. We use this to discuss the potential of different policies to support supply chain resilience.