Andrés Méndez Ruiz
I am fascinated by human behavior. A few lusters ago I discovered economics and econometrics. Since then, I have dedicated countless hours to perfecting my craft as an empirical economist. I have been lucky to have great teachers, mentors, and peers. To them I will be forever grateful. Without exaggerating, economics has shaped who I am. It has not only given me a powerful framework to analyze and understand individual and social behavior. More importantly, it has reinforced my curious personality. Rah-rah to always expanding my analysis toolkit! Hurray for the new questions and the datasets to come that I will patiently dissect to obtain answers! Yippee-kai-yay!
Industrial Organization, Structural Econometrics, and Energy and Environmental Economics
My primary area of research combines industrial organization with energy and environmental economics. I am motivated by the challenge of developing empirical models that accurately capture the essential institutional details of an industry to answer specific policy questions with the available data. In many industries, opportunities exist for firms to share the costs of building and operating infrastructure for production and waste/pollution management. This type of cooperation, however, requires firms to contract with each other. I am interested in understanding various aspects of this type of strategic cooperation and inter-firm contracting, such as how it is related to market structure, what frictions could be preventing firms from contracting with each other efficiently, how do these frictions affect firm and industry outcomes, and what types of policies are most effective in achieving better outcomes for the industry and for society as a whole.
Job Market Paper
Unconventional fossil fuel extraction technology and favorable market conditions ignited an oil production boom in North Dakota. At its onset, around 2008, the state lacked enough pipeline infrastructure to capture all the associated natural gas extracted jointly with oil, resulting in large volumes of flared natural gas. It is in this context that I investigate the role of contracting costs in hindering firm cooperation in constructing pipelines, thus preventing firms from fully harnessing available mutual economies of scale. To do so, I model firms' well connection decisions as a static complete information game in which producers decide what fraction of their wells to connect, while considering the effect of externalities from other producers' actions on their own connection costs. I measure the extent of inter-firm contracting costs with respect to a benchmark case in which all wells are owned by a single firm, and as such inter-firm contracting costs are assumed to be zero. I also use my model to study what the investment outcome would be if contracting was costless in that sense. Finally, I compute a counterfactual to find what flaring penalty would result in market-level outcomes mimicking those of a single firm.