Zoe will discuss Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock

Title: “The Market Selection Hypothesis with Recursive Preferences: A General Framework and Robustness Analysis” (with Jaden Chen (Department of Economics, University of Carolina at Chapel Hill))

Title: “Countervailing power of firms in international trade”. It is available here: CountervailingPower_2023.pdf (annaignatenko.com) 

Abstract - This paper disentangles the effects of seller’s and buyer’s market power in firm-to-firm trade. I incorporate oligopoly, oligopsony, and bilateral bargaining in a trade model, in which buyers and sellers differ in productivity, bargaining ability, and preferences. These market structures predict differential patterns of price variation across buyers. Testing these predictions, I find, in most markets, price variation is consistent with oligopolistic price discrimination. More productive buyers pay lower mark-ups because of their better outside options, rather than scale economies, oligopsony power, or bargaining abilities. Consequently, more productive buyers have higher gains from trade and cost shocks’ pass-through into prices.