Ilango, Akhil

Contact Information

[email protected]

Personal Webpage

Available for interviews at

European Job Market for Economists (EEA)

Allied Social Science Associations (ASSA)

Research interests

Industrial Organisation, Digital Economy and Market Power

Placement Officer

References

Research

"Sponsored Search: Theory and Evidence on How Platforms Exacerbate Product Market Concentration” (Job Market Paper)
How do sponsored advertisements affect productmarket concentration, through their effects on firms’ pricing and consumer behaviour? To analyse this, I develop a theory of digital markets where an intermediary provides a platform for firms to advertise their product and where consumers need to engage in costly search if they want to learn about the product characteristics. First, I show that when prices are observable prior to the costly product inspection, the less prominent (lower in the search order) firm is forced to lower its price in order to attract more visitors, thus putting it at a competitive disadvantage. Second, I augment this model by allowing the intermediary to determine endogenously, through an auction, the order in which products are displayed and the advertising commissions to be paid (per-click). I show that the pass-through from these commissions to product prices is actually higher for the less prominent firm, thus further putting it at a competitive disadvantage. In equilibrium, these asymmetries in consumer price elasticity and commission pass-through lead to lower competition, consumer surplus and total transactions in the product market. Third, I show that the pay perclick business model is intermediary-optimal while the pay per-sale and the consumer subscription fee models improve consumer surplus at the expense of the intermediary. Fourth, I provide novel empirical evidence that is consistent with some key predictions of the model. These results contribute to the ongoing policy discussions on the effect of dominant digital platforms on productmarket concentration.

"Sleeping With the Enemy: How Politicians and Interest Groups Adapt their Collaborations” (with M. Espinosa and G. Zanarone)
How does the reputation of interest groups affect their collaboration with politicians? We address this question using unique data on the public speeches and lobbying contacts of U.S. legislators. We find that when external events tarnish a foreign country’s reputation, legislators with prior connections to that country publicly distance themselves from it through their speeches, while meeting more often with its lobbyists. Our results suggest that politicians and interest groups navigate crises by strategically decoupling the public and private dimensions of their collaboration. On the one hand, politicians protect themselves from reputational spillovers through public distancing. On the other hand, interest groups increase the assistance they provide to politicians via lobbying in order to motivate those politicians to continue a private collaboration that is now less appealing to them.

"Demand Distortions, Markups and Firm Growth"(with S. Goraya)
Local demand is an important determinant of firm growth in rural areas. In this project, we document the role of ethnic networks in segmenting the local demand and its implication for local firm growth and aggregate misallocation. We focus our analysis on India, where the caste system plays a significant role on individuals’ economic outcomes. First, we show that demand is segmented along caste lines. This, in turn, creates markup and productivity dispersion across firms owned by different castes. To identify this demand segmentation effect, we use exogenous changes in regional rainfall intensity as an instrument for local demand shocks. We find that consumers historically classified as belonging to the Low Caste (LC consumers) experience a positive income shock due to rainfall and that this translates into higher per-capita consumption for them. Further, we show that regional increase in the LC consumers’ demand translates into higher output growth and lower markup for the firms owned by members of the same “caste-category”, relative to others. Using a quantitative model, we plan to quantify the significance of demand channel in determining firm growth and misallocation.

Research Papers in Progress

“Sponsored Search: Structural Evidence from Clickstream Data"

“The Dynamics of Firm Prominence"

“Advertisement Auctions and Bidding Algorithms” (with M. Kang)

“Digital Influencers: A Market for Attention” (with W. Min)