Steven Tadelis

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We develop an equilibrium model of industrial structure in which the organization of Žrms is endogenous. Differentiated consumer products can be produced either by vertically integrated Žrms or by pairs of specialized companies. Production of each variety of consumer good requires a specialized component. Vertically integrated Žrms can manufacture the(More)
Should the buyer of a customized good use competitive bidding or negotiation to select a contractor? To shed light on this question, we consider several possible determinants that may influence the choice of auctions versus negotiations. We then examine a comprehensive data set of private sector building contracts awarded in Northern California during the(More)
We present an equilibrium theory of the organization of work in an economy where knowledge is an essential input in production and agents are heterogeneous in skill. Agents organize production by matching with others in knowledge hierarchies designed to use and communicate their knowledge efficiently. Relative to autarky, organization leads to larger(More)
Internet advertising has been the fastest growing advertising channel in recent years with paid search ads comprising the bulk of this revenue. We present results from a series of largescale field experiments done at eBay that were designed to measure the causal effectiveness of paid search ads. Because search clicks and purchase behavior are correlated, we(More)
Internal competition may motivate worker effort, yet the benefits of competition may depend critically on workers’ relative abilities: large skill differences may reduce efforts. I use panel data from professional golf tournaments and find that the presence of a superstar is associated with lower performance. On average, golfers’ first-round scores are(More)
We explore patterns of vertical integration in the U.S. airline industry. Major airlines subcontract portions of their network to regional partners which may or may not be owned. We investigate if ownership may economize on ex post renegotiation costs. We estimate whether airlines are more likely to use owned regionals on city pairs with adverse weather(More)
Procurement contracts are often renegotiated because of changes that are required after their execution. Using highway paving contracts we show that renegotiation imposes significant adaptation costs. Reduced form regressions suggest that bidders respond strategically to contractual incompleteness and that adaptation costs are an important determinant of(More)
Internet advertising has been the fastest growing advertising channel in recent years with paid advertisements on search platforms (e.g., Google and Bing) comprising the bulk of this revenue. We present results from a series of large-scale field experiments done at eBay that are designed to detect the causal e↵ectiveness of paid search advertisements.(More)
Reputation mechanisms used by platform markets suffer from two problems. First, buyers may draw conclusions about the quality of the platform from single transactions, causing a reputational externality. Second, reputation measures may be coarse or biased, preventing buyers from making proper inferences. We document these problems using eBay data and claim(More)