Severin Borenstein


Last Updated April 21, 2008

Positions:

--- E.T. Grether Professor of Business Administration and Public Policy in the Economic Analysis and Policy Group of the Haas School of Business at the University of California at Berkeley

--- Affiliated Professor, Department of Agricultural & Resource Economics, U.C. Berkeley
--- Affiliated Faculty, Energy & Resources Group, U.C. Berkeley

--- Director of the University of California Energy Institute
--- Research Associate of the National Bureau of Economic Research


Contact Information:

Office Hours Spring 2008: Tuesdays 2:30-4pm most weeks, but best to email me in advance

Email: borenste@haas.berkeley.edu
WWW: http://faculty.haas.berkeley.edu/borenste

Haas School of Business
University of California
Berkeley, CA 94720-1900
phone: 510-642-3689

U.C. Energy Institute
2547 Channing Way
Berkeley, CA 94720-5180
phone: 510-642-5145
http://www.ucei.org


Teaching (Spring 2008):

Energy and Environmental Markets (MBA212), Tu/Th 11 a.m.-12:30 p.m.,  Room C210



Journal Publications:

"Price Discrimination in Free-Entry Markets," Rand Journal of Economics, 16(Autumn 1985).

 "On the Efficiency of Competitive Markets for Operating Licenses," Quarterly Journal of Economics, 103(May 1988).

 "Market Incentives for Safe Commercial Airline Operation," (with Martin Zimmerman), American Economic Review, 78(December 1988).

 "The Economics of Costly Risk Sorting in Competitive Insurance Markets," International Review of Law and Economics, 9(June 1989).

 "How to Carve a Medical Degree: Human Capital Assets in Divorce Settlements," (with Paul Courant), American Economic Review, 79(December 1989).

 "Hubs and High Fares: Dominance and Market Power in the U.S. Airline Industry," Rand Journal of Economics, 20(Autumn 1989).

 "Airline Mergers, Airport Dominance, and Market Power," American Economic Review Papers and Proceedings, 80 (May 1990).

 "Carrot and Yardstick Regulation: Enhancing Market Performance with Output Prizes," (with Mark Bagnoli), Journal of Regulatory Economics, 3(June 1991).

 "The Dominant-Firm Advantage in Multi-Product Industries: Evidence from the U.S. Airlines," Quarterly Journal of Economics, 106(November 1991).

 "Selling Costs and Switching Costs: Explaining Retail Gasoline Margins," Rand Journal of Economics, 22(Autumn 1991).

 "The Evolution of U.S. Airline Competition," Journal of Economic Perspectives, 7(Spring 1992).

 "Competition and Price Dispersion in the U.S. Airline Industry," (with Nancy Rose), Journal of Political Economy, 103(August 1994).

 "Antitrust Policy in Aftermarkets," (with Jeffrey MacKie-Mason and Janet Netz), Antitrust Law Journal, 63(Winter 1995).

 "Bankruptcy and Pricing Behavior in U.S. Airline Markets" (with Nancy Rose), American Economic Review Papers and Proceedings, 85(May 1995).

 "Dynamic Pricing in Retail Gasoline Markets" (with Andrea Shepard), Rand Journal of Economics, 27(Autumn 1996).

 "Market Power in California Electric Markets" (with James Bushnell, Edward Kahn, and Steven Stoft), Utilities Policy, 5(3/4, 1996).

 "Settling for Coupons: Discount Contracts as Compensation and Punishment in Antitrust Lawsuits," Journal of Law and Economics, 39(October 1996).

 "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?" (with Colin Cameron and Richard Gilbert), Quarterly Journal of Economics, 112(February 1997).

 "Why Do All the Flights Leave at 8 a.m.? Competition and Departure-Time Differentiation in Airline Markets" (with Janet Netz), International Journal of Industrial Organization, 17(July 1999).

 "An Empirical Analysis of Market Power in a Deregulated California Electricity Market" (with James Bushnell), Journal of Industrial Economics, 47(September 1999).

 "Market Power in Electricity Markets: Beyond Concentration Measures" (with James Bushnell and Christopher R. Knittel), Energy Journal, 20(4, 1999).

 "Is Cost Cutting Evidence of X-Inefficiency?" (with Joe Farrell), American Economic Review Papers and Proceedings, 90(May 2000).

 "Exercising Market Power in Proprietary Aftermarkets," (with Jeffrey MacKie-Mason and Janet Netz), Journal of Economics and Management Strategy, 9(Summer 2000).

"The Competitive Effects of Transmission Capacity in a Deregulated Electricity Industry" (with James Bushnell and Steven Stoft), Rand Journal of Economics, 31(Summer 2000). (Also, some brief Supplementary Materials are available)

"Economics and Electronic Commerce" (with Garth Saloner), Journal of Economic Perspectives, 15(Winter 2001).

"The Trouble with Electricity Markets: Understanding California's Restructuring Disaster,'' Journal of Economic Perspectives, 16(Winter 2002)

 ``Sticky Prices, Inventories, and Market Power in Wholesale Gasoline Markets'' (with Andrea Shepard ), Rand Journal of Economics, 33(Spring 2002).

``Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market,'' (with James Bushnell and Frank Wolak), American Economic Review, 92(December 2002).

 "The Impact of Bankruptcy on Airline Service Levels" (with Nancy Rose ), American Economic Review Papers and Proceedings, 93(May 2003).

"On the Efficiency of Competitive Electricity Markets With Time-Invariant Retail Prices," (with Stephen Holland) Rand Journal of Economics, 36(Autumn 2005).

"The Long-Run Efficiency of Real-Time Electricity Pricing," Energy Journal, 26(3) (2005).

"Customer Risk from Real-Time Retail Electricity Pricing: Bill Volatility and Hedgability,"  The Energy Journal, 28(2), 2007.

"Wealth Transfers Among Large Customers from Implementing Real-Time Retail Electricity Pricing,"  The Energy Journal, 28(2), 2007.

 "Do Investors Forecast Fat Firms? Evidence from the Gold Mining Industry,'' (with Joe Farrell), Rand Journal of Economics, 38(Autumn 2007).

"Inefficiencies and Market Power in Financial Arbitrage: A Study of California's Electricity Markets" (with James Bushnell, Christopher Knittel, and Catherine Wolfram),  Journal of Industrial Economics, forthcoming.


Other Publications:

 "High Air Fares: Don't Blame Deregulation," Washington Post, August 25, 1987.

 "USAir Merger Promises Higher Fares, Less Competition," Hartford Courant, January 12, 1988.

 "Losses in Airline Demand and Value Following Accidents," (with Martin Zimmerman) in Moses and Savage, eds., Transportation Safety in an Age of Deregulation, Oxford: Oxford University Press, 1989.

 "Dissipating the Airline Deregulation Dividend: The Decline of Competition at Hub Airports," Regulation, Fall 1990 (and reply letter in Winter 1991 issue).

 "Prospects for Competitive European Air Travel," in W.J. Adams, ed. Singular Europe: Economy and Polity of the European Community After 1992, Ann Arbor: University of Michigan Press, 1992.

 "USAir in 1986," (with Andrea Shepard), Stanford Graduate School of Business Strategic Management Case S-SM-4, January 1993.

 "The Economics of Customer Lock-In and Market Power in the Service Business," (with Jeffrey MacKie-Mason and Janet Netz) in Patrick T. Harker, ed. The Service Productivity and Quality Challenge, Kluwer Academic Press, 1994.

 "Uncle Sam at the Gas Pump: Causes and Consequences of Regulating Gasoline Distribution," (with Richard Gilbert), Regulation, Spring 1993.

 "A Guide to the Blue Book," (principal authors Carl Blumstein and James Bushnell), Electricity Journal, September 1994.

 "Repeat-Buyer Programs in Network Industries," in Werner Sichel ed., Networks, Infrastructure, and The New Task for Regulation, University of Michigan Press, 1996.

"Airline Deregulation," (with Nancy Rose) entry in The New Palgrave Dictionary of Law and Economics, New York: Grove's Dictionaries, 1998.

 "Rapid Communication and Price Fixing: The Airline Tariff Publishing Company Case," in John E. Kwoka and Lawrence J. White eds., The Antitrust Revolution: The Role of Economics, Oxford University Press, 3rd Edition, 1998.

 "A Cheaper Way to Clean Gasoline," (with Steven Stoft) San Francisco Chronicle, March 16, 1999.

 Comments on Kole and Lehn's "Workforce Integration and the Dissipation of Value in Mergers: The Case of USAir's Acquisition of Piedmont Aviation," in Steven Kaplan, ed., Mergers and Productivity, University of Chicago Press, 2000.

"California 'Lessons' derive from a Mischaracterization of our work" (with James Bushnell), letter in Electricity Journal, March 2000.

"Electricity Restructuring: Deregulation or Reregulation?," (with James Bushnell) Regulation, Vol. 23 No.2, 2000.

 "Understanding Competitive Pricing and Market Power in Wholesale Electricity Markets," Electricity Journal, July 2000.

"California consumers haven't seen benefits of deregulating the electrical industry yet -- What went wrong?," (with James Bushnell) San Jose Mercury News, August 27, 2000.

"Electricity Pricing Should Clue Consumers to Judicious Use," Los Angeles Times,
January 17, 2001.

"Government Aid to Airlines is Just Excess Baggage for Taxpayers ," Los Angeles Times, August 27, 2002.

"Time-Varying Retail Electricity Prices: Theory and Practice,'' in Griffin and Puller, eds., Electricity Deregulation: Choices and Challenges, Chicago: University of Chicago Press, 2005.

"Power Politics Hurts Consumers," Financial Times, August 19, 2003.

"What's Wrong with Regulating Gasoline Prices?", Sacramento Bee, September 12, 2003

"Solar Initiative Has a Dark Side", San Jose Mercury News, August 20, 2004

"Mere drops in the world's oil barrel", San Jose Mercury News, June 2, 2005

Testimony before the U.S. Senate Judiciary Committee on mergers in the oil and gasoline industry, March 14, 2006

"Will Solar PV Save You Money?", San Francisco Chronicle, April 21, 2008


Educational Software:

``The Competitive Strategy Game,'' Version 3.22, October 1998. A computer simulation of competition among firms for use in undergraduate and graduate courses in economics and business.  Version 3.22 is designed with an option to run the CSG through the CSG Home Page. Since Version 1.0, released in January 1994, the CSG has been used in undergrad, MBA, or Ph.D.  level courses at  over 60 universities and colleges in more than 15 countries.  Here is a list of those institutions.


Recent Working Papers:

"Cost,  Conflict and Climate: U.S. Challenges in the World Oil Market", Center for the Study of Energy Markets Working Paper #177, University of California Energy Institute, January 2008.

"The Market Value and Cost of Solar Photovoltaic Electricity Production", Center for the Study of Energy Markets Working Paper #176, University of California Energy Institute, January 2008.  A number of criticisms of this paper have been circulated by solar PV advocates.  I have written a response to the two most detailed and widely circulated critiques.

"Principal-agent incentives, excess caution, and market inefficiency: Evidence from utility regulation" (with Meghan Busse and Ryan Kellogg), Center for the Study of Energy Markets Working Paper #174, University of California Energy Institute, December 2007. (in submission)

"How Airline Markets Work...Or Do They? Regulatory Reform in the Airline Industry,"  (with Nancy Rose) National Bureau of Economic Research working paper #13452, forthcoming in N. Rose ed., Economic Regulation and Its Reform: What Have We Learned?, University of Chicago Press.

"Electricity Rate Structures and the Economics of Solar PV: Could Mandatory Time-of-Use Rates Undermine California’s Solar Photovoltaic Subsidies? Center for the Study of Energy Markets Working Paper #172, University of California Energy Institute, September 2007.  (Also Available: A Solar PV Cost Calculator excel file. See the paper for description of its use.)

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Not-So-Recent Working Papers:

"Valuing the Time-Varying Electricity Production of Solar Photovoltaic Cells," Center for the Study of Energy Markets Working Paper #142, University of California Energy Institute, March 2005.

"Retail Policies and Competition in the Gasoline Industry," (with James Bushnell) Center for the Study of Energy Markets Working Paper #144, University of California Energy Institute, May 2005.

"Market Power in California's Gasoline Market," (with James Bushnell and Matthew Lewis) Center for the Study of Energy Markets Working Paper #132, University of California Energy Institute, May 2004.

"Investment Efficiency in Competitive Electricity Markets With and Without Time-Varying Retail Prices," (with Stephen Holland), Center for the Study of Energy Markets Working Paper #106, University of California Energy Institute, November 2002.

"U.S. Domestic Airline Pricing, 1995-2004," Competition Policy Center Working Paper CPC05-48, University of California, Berkeley, January 2005.

"Price Incentives for Fuel Switching: Did Price Differences Slow the Phase-Out of Leaded Gasoline?" POWER Working Paper #PWP-010, University of California Energy Institute, April 1993.



Education:

1974-1976 --- Carleton College, Northfield, MN

 1977-1978 --- University of California, Berkeley, A.B. Economics

 1979-1983 --- Massachusetts Institute of Technology, Ph.D. Economics



Teaching Positions Held:

1983-1990 --- Assistant Professor of Economics and Public Policy, Department of Economics and Institute of Public Policy Studies, University of Michigan

 1989-1990 --- Visiting Assistant Professor of Economics, Department of Economics, University of California, Davis

 1990-1994 --- Associate Professor of Economics, Department of Economics, University of California, Davis

 1992,1993 --- Visiting Associate Professor of Business Economics (Autumn), Haas School of Business, University of California, Berkeley

 1994 --- Visiting Associate Professor of Business Economics (March), Distance learning MBA for Cathay Pacific Airlines, School of Business Administration, University of Michigan

 1994 --- Visiting Professor of Strategic Management (Winter), Graduate School of Business, Stanford University

 1994-1996 --- Professor of Economics, Department of Economics, University of California, Davis

 1996-2000 --- Professor of Business, Haas School of Business, University of California, Berkeley

 2000-present -- E.T. Grether Professor of Business Administration and Public Policy, Haas School of Business, University of California, Berkeley



Other Professional Positions:

1978-1979 --- Staff Economist, Office of Economic Analysis, U.S. Civil Aeronautics Board

 1992-Present --- Co-Director, Center for the Study of Energy Markets (formerly Program On Workable Energy Regulation), University of California

 1992-Present --- Research Associate, National Bureau of Economic Research

 1992-Present --- Associate Editor of Review of Economics and Statistics

 1993-2000 --- Associate Editor of International Journal of Industrial Organization

 1993-1995 --- Associate Editor of Journal of Industrial Economics

 1994-Present --- Director, University of California Energy Institute

 1995-2000 --- Editor, Journal of Industrial Economics

 1997-2003 --- Member, Governing Board of California Power Exchange Corporation

 1999-2000 --- Member, California Attorney General's Gasoline Task Force

 2000-2002 --- Co-Director of National Bureau of Economic Research E-Commerce Project

2004-present --- Member, Board of Editors, Journal of Economic Literature

2007-present -- Member, Board of Editors, American Economic Journal: Economic Policy



Honors, Scholarships, Fellowships and Grants:

1979-1981 --- M.I.T. Graduate Scholarship

 1982-1983 --- Alfred P. Sloan Foundation Research Fellowship

 1986 --- University of Michigan Rackham Research Fellowship

 1986-1987 --- University of Michigan Teaching Development Award

 1987-1990 --- National Science Foundation Research Grant #SES-8711576, "Efficiency in the Allocation of Operating Licenses"

 Fall 1987 --- Michigan Economic Society Undergraduate Teaching Award

 1988-1989 --- University of Michigan Rothschild Research Fellowship

 1991-1993 --- Universitywide Energy Research Group Research Grant (with Colin Cameron), "Asymmetric Retail Gasoline Price Responses to Crude Oil Price Changes"

 1997 --- Recipient, Cheit Award for Best Teacher in Haas Daytime MBA Program

 1997 --- Finalist, Cheit Award for Best Teacher in Haas PhD Program

 1998-2000 --- National Bureau of Economic Research/Sloan Foundation Research Grant (with Joseph Farrell), "Why Do Firms Cut Costs?"

 2002 --- Hewlett Foundation/Energy Foundation Research Grant, ``Price Responsive Demand in Electricity Markets''

2005 -- Distinguished Service Award, Public Utility Research Center, University of Florida

2005 -- Distinguished Faculty Mentoring Award (for graduate student mentoring), U.C. Berkeley

 2006 --- Finalist, Cheit Award for Best Teacher in Haas Daytime MBA Program