Author: Christopher Sandmann

I am an Assistant Professor in Economics at the London School of Economics. My research explores how search frictions affect sorting in matching markets. I have studied the rationale behind sparse product lines, and worked on higher-order beliefs—beliefs about other players' beliefs—and their manipulation in games of incomplete information. More recent work explores menu pricing in oligopolistic and competitive environments.

Free Coffee! How Competition Shapes Retail Experiences

Here in the UK, the supermarket chain Waitrose used to have an intriguing service model. After finishing their purchases, buyers could pick up a complimentary newspaper and order a coffee on their way out. The coffee machine in my local supermarket is back in use, but newspapers are no longer free. I thought of that when … Continue reading Free Coffee! How Competition Shapes Retail Experiences →

Why Do Banks Exist? An Incomplete Contracts Perspective

Bank lending has proven to be quite resilient. The onset of digital financial markets has not upended the fact that most small- and medium-sized companies seek financing from banks, not via the issuance of bonds. And if game-theoretic literature from the 80s and 90s is any guide, this will not change anytime soon. Decentralized bond … Continue reading Why Do Banks Exist? An Incomplete Contracts Perspective →

Coase on ‘the role of stupidity in human affairs’

I have to admit that I derive particular pleasure when economists are outright grumpy in their academic writing. Not all wisdom is tame. The following is an excerpt from an article written by 87-year-old Ronald H. Coase, who, when asked why a market-based allocation mechanism for spectrum licenses he had advocated for—decades later raising treasury … Continue reading Coase on ‘the role of stupidity in human affairs’ →

Monopolistic Competition: The Quality-Variety Trade-off in the Market for Advertisement-Financed Media

Numerous papers have examined the transformation of legacy media following the spread of social media in 2008. I will return to this topic. This post deals with an earlier period: the 80s and the advent of private, advertisement-financed television. There exists a prevailing notion that the introduction of private, advertisement-financed television led to a decline … Continue reading Monopolistic Competition: The Quality-Variety Trade-off in the Market for Advertisement-Financed Media →

Is Market Power Self-limiting? Secret Contracting in Upstream Markets

Many courses in economics begin with the first welfare theorem. This theorem states that a decentralized market, if left to its own devices, will reach an allocation that cannot be changed to further improve the economic welfare of all market participants. A proof of this result is as simple as it is intuitive: If there … Continue reading Is Market Power Self-limiting? Secret Contracting in Upstream Markets →