Sales from the US Strategic Petroleum Reserve (SPR) are conducted using basis auctions, in which winning bidders' final payments are indexed to spot prices. This mechanism can eliminate potential inefficiencies arising from private information about the evolution of oil prices between auction and delivery, benefiting the seller (the US government). Reduced form evidence suggests that bids in SPR sales are consistent with pure private values despite significant uncertainty and a deep resale market. In a stylized model calibrated to the 2022 SPR drawdown, the use of basis auctions generates tens of millions of dollars in savings with limited private information.
Wastewater reuse in the shale gas industry mitigates environmental harms while reducing firms' private costs. Most reuse occurs within the firm boundary, but rival operators often exchange (or “share”) wastewater prior to reuse. I quantify private cost savings from reuse and sharing among Pennsylvania producers during the shale boom using an empirical model of transferrable utility matching. Model estimates imply that private cost savings are substantial but modest relevate to producer revenue, ruling out large rebound effects. I also find that sharing is subject to large transaction costs, implying that equilibrium consumption and disposal may be inefficiently high.
Identification and Estimation of Auction Models with Dual Risk-Averse Bidders with Tong Li and Jingfeng Lu.
Dual Risk Aversion and Optimal Reserve Prices in First- and Second-Price Auctions with Tong Li and Jingfeng Lu.
Research in Progress
Misallocation of water. The role of storage with Francisco Pareschi
Teaching
Econ 9500: Industrial Organization I Vanderbilt University (PhD)
Econ 3893: Selected Microeconomic Topics (Energy Economics) Vanderbilt University (Undergraduate)
