Robust Market Interventions

Andrea Galeotti, Benjamin Golub, Sanjeev Goyal, Eduard Talamas and Omer Tamuz

No 19574, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: A large differentiated oligopoly yields inefficient market equilibria. An authority with imprecise information about the primitives of the market aims to design tax/subsidy interventions that increase efficiency robustly---i.e., with high probability. We identify a condition on demand that guarantees the existence of such interventions, and we show how to construct them using noisy estimates of demand complementarities and substitutabilities across products. The analysis works by deriving a novel description of the incidence of market interventions in terms of spectral statistics of a Slutsky matrix. Our notion of recoverable structure ensures that parts of the spectrum that are useful for the design of interventions are statistically recoverable from noisy demand estimates.

Date: 2024-10
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP19574 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:19574

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP19574

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().