Matteo Broso

We study the impact of market concentration on elections and lobbying in a political agency model with adverse selection and moral hazard. Two incumbent firms can lobby a politician (P) to prevent a pro-competitive reform. P's type determines whether they care about bribes or not. A representative voter tries to infer P's type monitoring the policymaking process. We investigate the welfare implications of a merger between the two firms. In equilibrium, the merger increases firms' incentives to lobby and their ability to influence politics. This additional political power reduces the chances that the pro-competitive reform is approved, hurting consumers; but it allows the voter to defeat a corruptible P with higher probability. Thus, it improves the voter's screening and mitigates adverse selection. We discuss how this new trade-off interacts with traditional competition considerations in the merger's assessment.

Men and women often sort into different jobs, and male-dominated jobs typically pay more than female-dominated ones. Why is that the case? We propose a model where workers have heterogeneous attitudes with respect to the social norms that define gender prescribed occupations and face endogenous social costs when entering jobs deemed "appropriate" for the other gender.
We show that: (i) workers trade off identity and wage considerations in deciding where to work; (ii) asymmetric social norms contribute to the gender pay gap by deterring women from entering higher-paying male-dominated sectors; (iii) breaking social norms generates positive externalities, reducing social stigma for everyone. Therefore, in equilibrium, there are too few social norm breakers.

I study a product differentiation model with endogenous entry where a politically connected public firm competes with a private one. Consumers are heterogenous in their willingness to pay. First, I argue that because of political ties, the public firm may mimic the preferences of the consumer with the median type. Then, I show that as privatization increases, the market outcome shifts from an inefficient public monopoly to a duopoly, where the public firm can even be more profitable than the private one, and welfare is higher. However, full privatization is not socially optimal as it implies excessive product differentiation.

When a firm is large enough, its distress (or off-shoring) can be a threat for society as a whole. Large firms can leverage this threat to obtain favors from politics no matter if distress is true or not. I present a dynamic model where a firm can acquire its competitors and lobby office-seeking politicians to obtain favors. The equilibrium dynamics features a snowball effect. The firm acquires competitors to obtain political power. Political power, in turn, helps the firm to acquire new competitors by allowing it to survive periods of distress with higher probability. 

We study how closeness of elections affects campaign contributions from corporations. We develop a model in which a corporation can offer contributions to office-seeking political candidates in exchange for favors. The model predicts that candidates in close elections may receive more funding because of both demand and supply effects. We use U.S. House election data from 1974 to 2014, and leverage the quasi-random variation in districts' competitiveness induced by incumbents’ deaths, to provide empirical evidence supporting this claim. Preliminary results show that corporate campaign contributions increase in districts following an incumbent’s death relative to other districts in the same electoral cycle.