Sales Force and Competition in Financial Product Markets: The Case of Mexico's Social Security Privatization

• 成果类型: Article
• 署名作者: Hastings, Justine; Hortacsu, Ali; Syverson, Chad
• 署名单位: Brown University; National Bureau of Economic Research; University of Chicago; University of Chicago
• 刊物名称: ECONOMETRICA
• ISSN/ISSBN: 0012-9682
• DOI: 10.3982/ECTA12302
• 发表日期: 2017
• 页码: 1723-1761
• 关键词: consumer search; price; MODEL; obfuscation; INFORMATION; PSYCHOLOGY; ECONOMICS; selection; entry; plan

摘要

This paper examines how sales force impacts competition and equilibrium prices in the context of a privatized pension market. We use detailed administrative data on fund manager choices and worker characteristics at the inception of Mexico's privatized social security system, where fund managers had to set prices (management fees) at the national level, but could select sales force levels by local geographic areas. We develop and estimate a model of fund manager choice where sales force can increase or decrease customer price sensitivity. We find exposure to sales force lowered price sensitivity, leading to inelastic demand and high equilibrium fees. We simulate oft proposed policy solutions: a supply-side policy with a competitive government player and a demand-side policy that increases price elasticity. We find that demand-side policies are necessary to foster competition in social safety net markets with large segments of inelastic consumers.