[AI Seminar] Heinz Faculty Research Seminar: Dec 7 - Patrick Bajari, VP and Chief Economist, Amazon
copetas at cs.cmu.edu
Tue Dec 1 16:41:06 EST 2015
Of special interest....
Patrick Bajari is Vice President and Chief Economist for Amazon. He will
be the speaker at the Heinz Faculty Research Seminar on Monday,
*December 7th, 2015 at 12:00 noon in room 1000, Hamburg Hall*. Below you
will find the details for his talk. Please distribute this announcement
to appropriate lists in your departments.
*Demand Estimation in a High Dimensional Data and an Application to
Amazon’s Book Marketplace
In this paper, we document some basic facts about Amazon’s e-commerce
platform using several unique datasets. There are both sizeable applied
theory and empirical literatures which address e-commerce. We contribute
to the empirical literature by examining datasets from Amazon that
contain the entire population of product sales, product offers and
sellers from multiple countries and for multiple product lines. We also
include important control variables that have been omitted from previous
research. We begin by examining a dataset of all physical books and
e-books that were buyable on Amazon as of November 2014. The selection
available to consumers is large - there were 44 million unique physical
book titles available for purchase in the US and over 33 million unique
physical book titles in the EU in November 2014. Approximately two
million e-books are self-published accounting for two thirds of
total selection. Next, following the method in Brynjolfsson, Hu and
Smith (2003) we estimate the compensating variation for book selection
available on Amazon’s book marketplace. We apply a novel estimation
procedure to obtain elasticities required for this calculation which
incorporates a mixture of traditional econometric approaches and machine
learning approaches. We estimate an annualized 2014 benefit to consumers
of $2.2 billion in the US and $2.1 billion in the EU. We continue by
documenting some basic facts about the supply side of the platform.
Specifically, we summarize the number of offers by seller in select
product categories, summarize the number of distinct 3rd party sellers
listing products on Amazon, and provide estimates for the number of
employees at 3rd party sellers. An average book in our sample has 20
competing offers. Consistent with a large number of multiple offers we
find that the median residual elasticity ranges from -7 to -32 for
several product lines in multiple countries. There were over 1.1 million
merchants with offers on books on November 2014 and hundreds of
thousands of merchants offering books in the EU. Finally, we estimate
the number of full time employees directly attributable to all sellers
in all product lines. We estimate 414,550 employees at 3rd part sellers
in the US and 233,612 employees at 3rd party sellers in the EU in 2014.
Pat Bajari is Vice President and Chief Economist for Amazon. He earned
his doctorate in economics in 1997 from the University of Minnesota
where he specialized in applied econometrics and empirical industrial
organization. He was a member of the economics faculty at Harvard,
Stanford, Duke and Minnesota and is a research fellow at the NBER.
Pat worked for the Boston Consulting Group from 1999 to 2010 in pricing,
providing applied econometric work to guide decision making in a variety
of industries. He also worked as a consultant to the research
departments for the Federal Reserve Banks of San Francisco and
Minneapolis and served as an antitrust expert witness.
Pat joined Amazon in 2010 where he reports to Jeff Wilke, the Senior
Vice President for the North American Consumer Platform. He has used
economic and econometric tools to build automated systems for pricing,
forecasting, ordering, marketing spend in addition to providing applied
econometric analysis on a host of other business problems.
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