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Steven Tadelis - Haas School of Business, University of California, Berkeley. Berkeley, CA, US

Steven Tadelis Steven Tadelis

Professor of Economics | Sarin Chair in Leadership and Strategy | Haas School of Business, University of California, Berkeley

Berkeley, CA, UNITED STATES

Leading expert on e-commerce and internet economics

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Areas of Expertise (6)

E-Commerce Competition and Industrial Organization Procurement Contracting Incentives and Economics of Organizations Theory of the Firm Game Theory

About

Steve Tadelis is a Professor of Economics and Sarin Chair in Leadership and Strategy at Berkeley Haas. His research primarily revolves around e-commerce and the economics of the internet.

During the 2016-2017 academic year he was on leave at Amazon, where he applied economic research tools to a variety of product and business applications and worked with technologists, computer and ML scientists, and business leaders. During the 2011-2013 academic years he was on leave at eBay research labs, where he hired and led a team of research economists who focused on the economics of e-commerce, with particular attention to creating better matches of buyers and sellers; reducing market frictions by increasing trust and safety in eBay's marketplace; understanding the underlying value of different advertising and marketing strategies; and exploring the market benefits of different pricing structures.

Aside from the economics of e-commerce, his main fields of interest are the economics of incentives and organizations, industrial organization, and microeconomics. Some of his past research aspired to advance our understanding of the roles played by two central institutions—firms and contractual agreements—and how these institutions facilitate the creation of value. Within this broader framework, Tadelis explored firm reputation as a valuable, tradable asset; the effects of contract design and organizational form on firm behavior with applications to outsourcing and privatization; public and private sector procurement and award mechanisms; and the determinants of trust.

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Education (3)

Harvard University: PhD, Economics

Techion, Haifa, Israel: MSc, Economics

University of Haifa, Haifa, Israel: BA, Economics

Honors & Awards (9)

Honorable Mention, Cheit Teaching Award, Full-Time MBA Program

2010 – 2011

Montias prize – best article published in the Journal of Comparative Economics

2010 – 2011

Barbara and Gerson Bakar Faculty Fellow, UC Berkeley Haas School of Business

2008 – 2015

Phi Beta Kappa Undergraduate Teaching Award, Stanford University,

2005

Department of Economics Advising Award, Stanford University

2002

W. Glenn Campbell and Rita Ricardo-Campbell National Fellow, Hoover Institution

1999 – 2000

Review of Economic Studies Euorpean Tour Speaker

May 1997

Alfred P. Sloan Doctoral Dissertation Fellowship

1995 – 1996

National Science Foundation Research Grants

1999 – 2000, 2000 – 2002, 2003 – 2008

Selected External Service & Affiliations (6)

  • 2016 – present, CESifo Research Network Fellow
  • 2015 – present, Research Fellow, Centre for Economic Policy Research (CEPR)
  • 2014 – present, Research Associate, National Bureau of Economic Research (NBER)
  • 2011 - 2014, Co-Editor, Journal of Law, Economics and Organization
  • 2004 - 2007, Editorial Board, American Economic Review
  • 2004 - 2007, Associate Editor, International Journal of Industrial Organization

Languages (1)

  • Hebrew

Positions Held (1)

At Haas since 2005

2018 – present, Sarin Chair in Strategy and Leadership
2016 – 2018, James J. and Marianne B. Lowrey Chair in Business
2016 – 2017, VP of Economics and Market Design, Amazon.com Inc.
2015 – present, Professor of Economics, Business and Public Policy, Haas School of Business
2015 – 2016, Joe Shoong Chair in International business
2005 – 2015, Associate Professor, Haas School of Business
2011 – 2013, Senior Director and Distinguished Economist, eBay Research Labs
2006 – 2009, Associate Dean for Strategic Planning, Haas School of Business
1997 – 2005, Assistant Professor, Stanford University

Media Appearances (8)

American government workers are feeling the shutdown’s financial impact

The Economist  online

2019-01-23

The shutdown may have serious consequences for federal workers. A paper by Prof. Steven Tadelis, James J. and Marianne B. Lowrey Chair in Business, found that a surprisingly high share of federal workers live paycheck to paycheck, with about a third having virtually no cash in their bank accounts on payday.

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The chart that shows the financial peril facing federal workers

New York Times  online

2019-01-16

In an op-ed co-authored by Steven Tadelis, Professor of Economics, Business and Public Policy, he writes that a large majority of government workers don't have enough money in the bank to cover expenses for two weeks.

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California's economy could suffer if the government shutdown drags into February

CNBC  online

2019-01-15

According to Steven Tadelis, Professor of Economics, Business and Public Policy and James J. and Marianne B. Lowrey Chair in Business, California's diverse economy will help it weather the shutdown. But he said it's possible that towns where a large percentage of federal workers are located could start to feel the pinch.

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Self Check-Out: Love it or Hate it?

ABC7 News  online

2017-10-31

"Economics professor Steve Tadelis at UC Berkeley's Haas School of Business says once the kinks and wrinkles are out most people will adopt..."

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A Nobel prize for economic theory you can understand

Marketplace  online

2016-10-10

“We want them to raise our kids to be creative, to be mensches,” said economist Steve Tadelis of the Haas School of Business at UC Berkeley. “You will force them to just spend all their energy on that one thing, because that’s what they are getting paid for.”

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Want to Pay Less in Your Online Shopping? Search More

The Wall Street Journal  online

2016-06-17

"That is the implication of a new study that analyzed searching and shopping behavior among eBay users. It found that people search a lot more online than was previously thought, that more searching yields lower prices and that patient users in particular tend to search more and pay less..."

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How Alexa, Siri, and Google Assistant Will Make Money Off You

MIT Technology Review  online

2016-05-31

'Still, the deep-pocketed progenitors of these virtual assistants probably aren’t very concerned about their business models just yet, says Steven Tadelis, a professor at the University of California, Berkeley, Haas Business School...'

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Amazon on pace to boast Fortune 500’s second-largest workforce

The Seattle Times  online

2016-02-20

'Steve Tadelis, an economics professor specializing in e-commerce at University of California Berkeley’s Haas School of Business, says Amazon’s prodigious expansion is cost-conscious and data-driven. By investing in machines in areas where the human touch adds friction and keeping the human touch where gut decision-making is needed, “in theory they could grow quite dramatically...”'

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Working Papers (8)

Price Salience and Product Choice

October 2018
Steven Tadelis, Tom Blake, Kane Sweeney, and Sarah Moshary

We study the effect of price salience on whether a product is purchased and, conditional on purchase, the quality purchased. Consistent with our theoretical predictions, we find that making the full purchase price salient to consumers reduces both the quality and quantity of goods purchased. The effect of salience on quality accounts for at least 28% of the overall revenue decline. Evidence shows that the effects persist beyond the first purchase and impact even experienced users. Detailed click-stream data shows that price-obfuscation makes price comparisons difficult and results in consumers spending more than they otherwise would. We also find that sellers respond to the increased price obfuscation by listing higher quality tickets. JEL classifications: C93, D12, D83, L11

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Certification, Reputation and Entry: An Empirical Analysis

July 2018
Steven Tadelis, Xiang Hui, Maryam Saeedi, and Giancarlo Spagnolo

Markets with asymmetric information will often employ third-party certification labels to distinguish between higher and lower quality transactions, yet little is known about the effects of certification policies on the evolution of markets. How does the stringency in quality certification affect the intensity and composition of entry, incumbents' reactions, and market outcomes? We use detailed administrative data and exploit a policy change on eBay to explore how a more selective certification policy affects entry and behavior across a rich set of online market segments. We find that after the policy change, entry increases and does so more intensely in markets where it is harder to become certified. The average quality of entrants also increases more in the more affected markets, while the quality distribution of entrants exhibits fatter tails ex post. Finally, some incumbents increase the quality of their service to maintain certification and deliver higher quality after the policy change. The results help inform the design of certification policies in electronic and other markets with asymmetric information. JEL classifications: D47, D82, L15, L86

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Sequential Bargaining in the Field: Evidence from Millions of Online Bargaining Interactions

March 2018
Steven Tadelis, Matt Backus, Tom Blake, and Brad Larsen

We study patterns of behavior in bilateral bargaining situations using a rich, new dataset describing over 88 million listings from eBay's Best Offer platform, with back-and-forth bargaining occurring in over 25 million of these listings. We document patterns of behavior and relate them to "rational" and "psychological" theories of bargaining and find that bargaining patterns are consistent with elements of both approaches. Most notably, players with more bargaining strength typically receive better outcomes, and players exhibit equitable behavior by making offers that split-the-difference between negotiating positions. We are publicly releasing this new dataset to support additional empirical bargaining research. JEL classifications: C78, D82, D83, M21

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The Response of Consumer Spending to Changes in Gasoline Prices

September 2016
Steven Tadelis, Michael Gelman, Yuriy Gorodnichenko, Shachar Kariv, Dmitri Koustas, Matthew D. Shapiro, and Dan Silverman

This paper estimates how overall consumer spending responds to changes in gasoline prices. It uses the differential impact across consumers of the sudden, large drop in gasoline prices in 2014 for identification. This estimation strategy is implemented using comprehensive, daily transaction-level data for a large panel of individuals. The estimated marginal propensity to consume (MPC) is approximately one, a higher estimate than estimates found in less comprehensive or well-measured data. This estimate takes into account the elasticity of demand for gasoline and potential slow adjustment to changes in prices. The high MPC implies that changes in gasoline prices have large aggregate effects. JEL classifications: D12, D91, E21, H31

Expectation, Disappointment, and Exit: Evidence on Reference Point Formation from an Online Marketplace

March 2017
Steven Tadelis, Matt Backus, Tom Blake, and Dimitriy Masterov

We study expectation-based reference point formation using data from ascending auctions in an online marketplace. Our model formalizes the hypothesis that a disappointment-averse bidder who spends more time in the lead prior to a sudden loss will suffer a higher degree of disappointment. We find that for every additional day in the lead, bidders who lose abruptly are 6 percentage points more likely to exit the marketplace. In contrast, for losing bidders whose expectations are informed by higher competing bids, there is no effect. Also consistent with our model of platform exit, more experienced bidders show less sensitivity to disappointment. JEL classifications: D03, D47, D83

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The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment

January 2015
Steven Tadelis and Chris Nosko

Reputation mechanisms used by platform markets suffer from two problems. First, buyers may draw conclusions about the quality of the platform from single transactions, causing a reputational externality. Second, reputation measures may be coarse or biased, preventing buyers from making proper inferences. We document these problems using eBay data and claim that platforms can benefit from identifying and promoting higher quality sellers. Using an unobservable measure of seller quality we demonstrate the benefits of our approach through a large-scale controlled experiment. Highlighting the importance of reputational externalities, we chart an agenda that aims to create more realistic models of platform markets. JEL classifications: D47, D82, L15, L21, L86 

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Buying Reputation as a Signal of Quality: Evidence from an Online Marketplace

August 2016
Steven Tadelis, Lingfang (Ivy) Li, and Xiaolan Zhou

Reputation is critical to foster trust in online marketplaces, yet leaving feedback is a public good that can be under-provided unless buyers are rewarded for it. Signaling theory implies that only high quality sellers would reward buyers for truthful feedback. We explore this scope for signaling using Taobao's \reward-for-feedback" mechanism and find that items with rewards generate sales that are nearly 30% higher and are sold by higher quality sellers. The market design implication is that marketplaces can benefit from allowing sellers to use rewards to build reputations and signal their high quality in the process. JEL classifications: D47, D82, L15, L86 

The Power of Shame and the Rationality of Trust

March 2011
Steven Tadelis

A mounting number of studies suggest that individuals are not selfish, which perhaps explains the prevalence of trust among strangers. Models of players who care about their opponents' payoffs have been used to rationalize these facts. An alternative motive is that players care directly about how they are perceived by others. I propose and implement an experimental design that distinguishes perception motives from payoff motives. Participants not only exhibit concerns for perception, but they seem strategically rational by anticipating the change in behavior of their opponents. The approach can explain previously documented behaviors, both in the lab and in the field, and can shed light on some determinants of trust. JEL classifications C72, C91, D03, D82

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Selected Papers & Publications (10)

Reputation and Feedback Systems in Online Platform Markets Annual Review of Economics

Steven Tadelis

2016

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Information Disclosure as a Matching Mechanism: Theory and Evidence from a Field Experiment American Economic Review

Steven Tadelis, Florian Zettelmeyer

2015

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Consumer Heterogeneity and Paid Search Effectiveness: A Large Scale Field Experiment Econometrica

Steven Tadelis, Chris Nosko, Tom Blake

2015

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Harnessing Naturally-Occurring Data to Measure the Response of Spending to Income Science

Steven Tadelis, Michael Gelman, Shachar Kariv, Matthew D. Shapiro, Dan Silverman

2014

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Bidding for Incomplete Contracts: An Empirical Analysis American Economic Review

Steven Tadelis, Pat Bajari, Stephanie Houghton

2014

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Auctions versus Negotiations in Procurement: An Empirical Analysis Journal of Law, Economics and Organization

Steven Tadelis, Patrick Bajair, and Robert McMillan

2009

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Profit Sharing and the Role of Professional Partnerships Quarterly Journal of Economics

Steven Tadelis and Jonathan Levin

2005

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The Market for Reputations as an Incentive Mechanism Journal of Political Economy

Steven Tadelis

2002

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Complexity, Flexibility and the Make-or-Buy Decision American Economic Review Papers and Proceedings

Steven Tadelis

2002

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How Individuals Respond to a Liquidity Shock: Evidence from the 2013 Government Shutdown Journal of Public Economics

Steven Tadelis, Michael Gelman, Shachar Kariv, Matthew Shapiro, Dan Silverman

2019-08-20

Using comprehensive account records, this paper examines how individuals adjusted spending and saving in response to a temporary drop in liquidity due to the 2013 U.S. government shutdown. The shutdown cut paychecks by 40% for affected employees, which was recovered within 2 weeks. Because the shutdown affected only the timing of payments, it provides a distinctive experiment allowing estimates of the response to a liquidity shock holding income constant. Spending dropped sharply, implying a naïve estimate of 58 cents less spending for every dollar of lost liquidity. This estimate overstates the consumption response. While many individuals had low liquid assets, they used multiple sources of short-term liquidity to smooth consumption. Sources of short-term liquidity include delaying recurring payments such as for mortgages and credit card balances.

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Teaching (3)

Economic Analysis for Business Decisions

MBA 201A

The Economics of Institutions

PhD

Mechanism Design and Agency Theory

Economics 206, PhD

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