Professor MacKay combines theory and measurement to deliver new insights about price competition. In current and published papers, his research addresses how strategic pricing decisions may be influenced by algorithms, long-term contracts, vertical restraints, and dynamic consumer behavior. His work considers the broader implications for firms and for competition authorities, whose existing frameworks have primarily been guided by more limited price-setting models.
Professor MacKay has examined how dynamic consumer behavior, which can arise from switching costs or brand loyalty, influences firm markups. His research shows that strategic pricing that accounts for dynamic consumer behavior may mitigate the potential price effects of a change in competition through entry, merger, or exit. Thus, dynamic consumer behavior has important implications for firm profits and consumers.
His research suggests new considerations for how price competition might be regulated. In examining the use of pricing algorithms in online markets, he shows that the adoption of higher-frequency algorithms by one or more firms can allow all firms to charge higher markups, without resorting to tacit or explicit collusion. Thus, unregulated pricing technology may allow firms to increase prices, even to the collusive levels, without running afoul of antitrust authorities. In the context of electricity markets, his research finds that deregulation led to substantial increases in markups and prices. The findings show how, contrary to the prevailing wisdom, deregulated prices can benefit firms at the expense of consumers.
Alexander J. MacKay
Assistant Professor of Business Administration
Assistant Professor of Business Administration
Alexander MacKay is an assistant professor of business administration in the Strategy Unit. His research focuses on matters of competition, including pricing, demand, and market structure. Previously, he was a postdoctoral scholar at Harvard Business School and at Harvard Kennedy School.
For more details about his research, please visit alexandermackay.org.
For more details about his research, please visit alexandermackay.org.
Alexander MacKay is an assistant professor of business administration in the Strategy Unit. His research focuses on matters of competition, including pricing, demand, and market structure. Previously, he was a postdoctoral scholar at Harvard Business School and at Harvard Kennedy School.
Professor MacKay earned his Ph.D. in economics from the University of Chicago. Prior to his doctoral degree, he worked at a consulting firm that specialized in the design and analysis of business experiments. He has a B.A. in economics from the University of Virginia.
- Journal Articles
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- Egan, Mark, Alexander J. MacKay, and Hanbin Yang. "Recovering Investor Expectations from Demand for Index Funds." NBER Working Paper Series, No. 26608, January 2020. (Accepted at the Review of Economic Studies. Harvard Business School Working Paper, No. 20-122, May 2020. Direct download. Revised July 2021.) View Details
- MacKay, Alexander J. "Contract Duration and the Costs of Market Transactions." American Economic Journal: Microeconomics (forthcoming). View Details
- Deryugina, Tatyana, Alexander MacKay, and Julian Reif. "The Long-Run Dynamics of Electricity Demand: Evidence from Municipal Aggregation." American Economic Journal: Applied Economics 12, no. 1 (January 2020): 86–114. View Details
- MacKay, Alexander, and David A. Smith. "Challenges for Empirical Research on RPM." Review of Industrial Organization 50, no. 2 (March 2017): 209–220. View Details
- MacKay, Alexander, Nathan H. Miller, Marc Remer, and Gloria Sheu. "Bias in Reduced-form Estimates of Pass-through." Economics Letters 123, no. 2 (May 2014): 200–202. View Details
- Working Papers
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- MacKay, Alexander, and Ignacia Mercadal. "Deregulation, Market Power, and Prices: Evidence from the Electricity Sector." Harvard Business School Working Paper, No. 21-095, February 2021. (Revised June 2021. Direct download.) View Details
- Brown, Zach Y., and Alexander MacKay. "Competition in Pricing Algorithms." Harvard Business School Working Paper, No. 20-067, November 2019. (Revised April 2021. Direct download.) View Details
- MacKay, Alexander, and Marc Remer. "Consumer Inertia and Market Power." Harvard Business School Working Paper, No. 19-111, April 2019. (Revised July 2021. Direct download.) View Details
- MacKay, Alexander, and Nathan H. Miller. "Estimating Models of Supply and Demand: Instruments and Covariance Restrictions." Harvard Business School Working Paper, No. 19-051, October 2018. (Revised April 2021. Direct download.) View Details
- Cases and Teaching Materials
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- MacKay, Alexander J. "Commonwealth Joe: January 2020 Update from CEO Robert Peck." Harvard Business School Multimedia/Video Supplement 721-851, September 2020. View Details
- MacKay, Alexander J. "Uber: Competing Globally." Harvard Business School Teaching Note 721-387, September 2020. View Details
- MacKay, Alexander J. "Commonwealth Joe Coffee Roasters." Harvard Business School Teaching Note 721-388, September 2020. View Details
- MacKay, Alexander J., Amram Migdal, and John Masko. "Uber: Competing Globally." Harvard Business School Case 720-404, April 2020. (Revised March 2021.) View Details
- Collis, David, and Alexander MacKay. "Choosing the Right Esports Business Model." Harvard Business School Case 719-459, March 2019. (Revised March 2020.) View Details
- MacKay, Alexander, and Ramon Casadesus-Masanell. "Commonwealth Joe Coffee Roasters." Harvard Business School Case 719-451, December 2018. (Revised December 2019.) View Details
- Research Summary
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- Additional Information
- Areas of Interest