Michele Fioretti

Curriculum Vitae

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Assistant Professor
Bocconi University (Economics)

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Affiliate Fellow, the University of Chicago Stigler Center
Affiliate, IGIER

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[email protected]

Welcome!

I am a researcher specializing in social responsibility and environmental economics, leveraging methods from industrial organization and trade.

You can explore my research and teaching materials below.

Work in Progress / List papers by topic

• NGO Activism: Exposure vs. Influence
  with Victor Saint-Jean and Simon Smith
  arXiv (v: 05/2025) / abstract
  Abstract: We analyze the timing of NGO campaigns to shed light on NGOs' strategies and how they evolve over time. Data from 2,500 campaigns show that NGOs are six times more likely to launch campaigns on their target's Annual General Meeting (AGM) date. Although this strategy increases media exposure and stakeholder scrutiny, resulting in consumer backlash and related shareholder proposals at the following AGM of the targeted firm, it has no impact on current AGM votes. As NGOs build reputational capital, they adjust their timing to influence AGM votes, revealing the trade-offs they face to drive corporate change.
• Prices and Concentration: A U-shape? Theory and Evidence from Renewables
  with Junnan He and Jorge Tamayo
  HBS wp 25-049 / arXiv (v: 04/2025) / AOM Proceedings / abstract
  Abstract: We show that when firms compete via supply functions, transferring high-cost capacity to the largest, most efficient firm—thereby diversifying its production technologies while increasing concentration—can lower prices by prompting the leader to expand output and competitors to aggressively defend market shares. However, large transfers prove anticompetitive, as sizable capacity differences discourage price undercutting. Exploiting renewable intermittencies in Colombia’s electricity market, where firms are technology-diversified, we consistently find a U-shape relationship between prices and concentration. Counterfactually reallocating 30% of competitors' high-cost capacities to the leader cuts prices 10%, while larger transfers raise them, revealing how capacity and efficiency influence market power.
• Transferable Know-How: Evidence from the Upstream Oil & Gas Industry
  with Alessandro Iaria, Aljoscha Janssen, Clément Mazet-Sonilhac and Robert K. Perrons
  arXiv (v: 3/2025) / ssrn / abstract
  Abstract: We investigate the consequences of the adoption of Enhanced Oil Recovery (EOR) on productivity, competition, and further technological adoption in the upstream oil & gas industry in the North Sea. Exploiting geological heterogeneity and a Norwegian Supreme Court decision that reduced policy uncertainty, we show that early EOR adopters increased their productivity and gained shares of the North Sea market through three channels. First, direct productivity gains due to EOR adoption. Second, specialization by transferring the acquired know-how to other EOR-eligible fields. Third, diversification through know-how-driven economies of scope that facilitated investments in non-EOR-eligible fields requiring alternative technologies.
• Accelerating Equity: Overcoming the Gender Gap in VC Funding
  with Chuan Chen, Junnan He and Yanrong Jia
  arXiv (v: 02/2025) / abstract
  Abstract: We examine the growing gender gap in venture capital funding, focusing on accelerator programs in the U.S. We collect a unique dataset with detailed information on accelerators and startups. Using a two-stage methodology, we first estimate a matching model between startups and accelerators, and then use its output to analyze the gender gap in post-graduation outcomes through a control function approach. Our results show that female-founded startups face a significant funding disadvantage, primarily due to relocation challenges tied to family obligations. However, larger cohorts and higher-quality accelerators help reduce this gap by offering female founders better networking opportunities and mentorship.
• The Shared Cost of Pursuing Shareholder Value
  with Victor Saint-Jean and Simon Smith
  arXiv (v: 12/2024) / abstract
  Abstract: We propose a portable framework to infer shareholders' preferences, their influence on firms' prosocial decisions, and the resulting economic consequences for firms and marginalized shareholders. Using quasi-experimental variations tied to media coverage of firms' annual general meetings, we find that shareholders support costly prosocial actions, such as covid-related donations and private sanctions on Russia, when these generate image gains. In contrast, shareholders that the public associates less to a specific firm, such as financial corporations with large portfolios, oppose such actions. These prosocial expenditures crowd out investments at exposed firms, reducing productivity and profits by 1 to 3%. Pursuing the values of some shareholders thus comes at a cost to others, which shareholders' monitoring motivated by heterogeneous preferences could mitigate. By highlighting the interplay between shareholder influence and firms' objectives, this study contributes to the broader debate on activism, showing how unobservable internal conflicts drive corporate responses to societal pressures.
• Two-Sided Market Power in Firm-to-Firm Trade
  with Vanessa Alviarez, Ken Kikkawa and Monica Morlacco
  R&R at American Economic Review
  pdf (v: 12/2022) / NBER wp / abstract
  Abstract: We develop a quantitative theory of prices in firm-to-firm trade with bilateral negotiations and two-sided market power. Markups reflect oligopoly and oligopsony forces, with relative bargaining power as weight. Cost pass-through elasticities into import prices can be incomplete or complete, depending on the exporter's and importer's bargaining power and market shares. In U.S. import data, we find that U.S. importers have substantial market power and disproportionate leverage in price negotiations. The estimated model produces accurate predictions of the impact of Trump tariffs on pair-level prices. At the aggregate level, ignoring two-sided market power could exaggerate tariff pass-through by about 60%.
• Capturing Subsidies or Storing Carbon: Evidence from the North Sea
  with Alessandro Iaria, Aljoscha Janssen, Clément Mazet-Sonilhac and Robert K. Perrons
  abstract
  Abstract: Addressing climate change, carbon capture and storage technologies have emerged to reduce atmospheric CO2. While capture technologies have advanced, storage investment lags. Governments, like the US with its Inflation Reduction Act ($370bn), are introducing CO2 storage subsidies, with the upstream oil and gas sector (O&G) aiming to benefit by adopting Enhanced Oil Recovery technologies (EOR), a carbon storage technology increases recovery rates by injecting CO2 into reservoirs. Our research examines whether subsidies boost EOR adoption, its effects on competition and production, and its actual impact on CO2 emissions in the high-polluting O&G sector. Challenges include that unobservable firm characteristics can influence EOR adoption and the recent timing of these subsidies, precluding long term industry analyses. We will leverage a 1985 policy change promoting EOR in Norway but not the UK, stressing firms' responses to these subsidies by developing dirtier fields over 50 years of data.
• Concentration and Markups in International Trade
  with Vanessa Alviarez, Ken Kikkawa and Monica Morlacco
  pdf soon / abstract
  Abstract: We study the relationship between industry concentration and aggregate markups in a model of firm-to-firm trade with two-sided market power. Theoretically, we show that the aggregate markup in an import market is a linear function of two concentration measures: it increases in the average Herfindhal index (HHI) of the exporters and it decreases in the average (modified) HHI of the importers in that market. We measure these concentration measures for Colombian imports during 2010-2020, show that they are correlated to aggregate import prices in ways predicted by the model, and discuss the implied evolution of aggregate markups. Compared to standard models where supplier concentration is the only relevant statistic, accounting for two-sided concentration and market power yields a richer picture around the evolution of aggregate markups in international trade.
  Presentations: ASSA 2023, AFSE 2023 (Sciences Po), CITP 2023 (Sussex), SED 2023
• Greening Banks: Shareholders vs. Stakeholders
  with Andrea Andolfatto, Clément Mazet-Sonilhac and Jean-Stéphane Mésonnier
  abstract
  Abstract: What makes large banks shift towards financing the transition at the global scale? What roles do stakeholders (e.g., depositors, shareholders, and regulators) have? Is peer pressure, notably via the membership in voluntary coalitions for climate, an effective way to motivate banks to support the transition? This project investigates these questions using a unique combination of public and proprietary individual datasets, either at the level of a large European country (France) to study pressure on banks from local depositors or globally to study the role of other stakeholders and institutional investors. By exploiting local environmental NGO campaigns and participation in international environmental alliances, our project will provide new insights into the role of activists and peer pressure in boosting the green transition of financial institutions.
  Status: Awarded a CIVICA grant. Data analysis ongoing
• Return to Scale in Decentralized Markets: Evidence from Mastodon
  with Mathias Dachert and Alessandro Iaria
  abstract
  Abstract: We study entry and business stealing in decentralized markets both theoretically and empirically by focusing on the social network Mastodon. A decentralized social network allows users to create different servers that communicates among each others like emails. Preliminary results find high levels of business stealing across Mastodon servers, which suggests a problem of excessive entry in decentralized network.
  Status: Ongoing data analysis.

Published & Forthcoming Papers

• Performance Pay in Insurance Markets: Evidence from Medicare
  with Hongming Wang
  Review of Economics and Statistics, 2023, 105.5: 1128–1144
  Policy Research Award at INFER 2020 / Media: VoxEU
  pdf (v: 07/2021) / gated / abstract
  Abstract: Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the quality bonus payment initiative in Medicare Advantage, we find that higher quality-rated insurers responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in enrollee health. Selection inflated the bonus payments and shifted the supply of high-rated insurance to the healthiest counties, reducing access to lower-priced, higher-rated insurance in the riskiest counties.
• Caring or Pretending to Care? Social Impact, Firms' Objectives, and Welfare
  Journal of Political Economy, 2022, 130.11: 2898-2942
  Awards: Prix Malinvaud 2023 / Best Paper Award at EEA-ESEM 2018 / Media: carenews.com
  pdf (v: 02/2022) / gated / abstract
  Abstract: Many firms claim that "social impact" influences their strategies. This paper develops a structural model that quantifies social impact as the sum of surpluses to a firm and its stakeholders. With data from a for-profit firm whose prosocial expenditures are measurable and salient to consumers, the analysis shows that the firm spends prosocially beyond profit maximization, thereby increasing welfare substantially. Incentivizing a standard profit-maximizing firm to behave similarly would require subsidies amounting to 58% of its prosocial expenditures because consumers’ willingness to pay is relatively inelastic to prosocial expenses. Therefore, social impact resembles a self-imposed welfare-enhancing tax with limited pass-through.
• Dynamic Regret Avoidance
  with Giorgio Coricelli and Sasha Vostroknutov
  AEJ: Microeconomics, 2022, 14.1: 70-93
  ssrn (v: 12/2020) / gated / abstract
  Abstract: In a stock market experiment we examine how regret avoidance influences the decision to sell an asset while its price changes over time. Participants know beforehand whether they will observe the future prices after they sell the asset or not. Without future prices participants are affected only by regret about previously observed high prices (past regret), but, when future prices are available, they also avoid regret about expected after-sale high prices (future regret). Moreover, as the relative sizes of past and future regret change, participants dynamically switch between them. This demonstrates how multiple reference points dynamically influence sales.
• Suboptimal Dishonesty: Rationality in the Absence of Strategic Behavior in Honesty Experiments
  with Sean Marden
  The Journal of Neuroscience, 2015, 35.5: 1817-1818
  pdf (v: 02/04/2015) / gated

Papers by Topic / List papers by status

Social Impact: Profit Maximization, Firms' Objectives, and Welfare

• NGO Activism: Exposure vs. Influence
  with Victor Saint-Jean and Simon Smith
  arXiv (v: 05/2025) / abstract
  Abstract: We analyze the timing of NGO campaigns to shed light on NGOs' strategies and how they evolve over time. Data from 2,500 campaigns show that NGOs are six times more likely to launch campaigns on their target's Annual General Meeting (AGM) date. Although this strategy increases media exposure and stakeholder scrutiny, resulting in consumer backlash and related shareholder proposals at the following AGM of the targeted firm, it has no impact on current AGM votes. As NGOs build reputational capital, they adjust their timing to influence AGM votes, revealing the trade-offs they face to drive corporate change.
• Accelerating Equity: Overcoming the Gender Gap in VC Funding
  with Chuan Chen, Junnan He and Yanrong Jia
  arXiv (v: 02/2025) / abstract
  Abstract: We examine the growing gender gap in venture capital funding, focusing on accelerator programs in the U.S. We collect a unique dataset with detailed information on accelerators and startups. Using a two-stage methodology, we first estimate a matching model between startups and accelerators, and then use its output to analyze the gender gap in post-graduation outcomes through a control function approach. Our results show that female-founded startups face a significant funding disadvantage, primarily due to relocation challenges tied to family obligations. However, larger cohorts and higher-quality accelerators help reduce this gap by offering female founders better networking opportunities and mentorship.
• The Shared Cost of Pursuing Shareholder Value
  with Victor Saint-Jean and Simon Smith
  arXiv (v: 12/2024) / abstract
  Abstract: We propose a portable framework to infer shareholders' preferences, their influence on firms' prosocial decisions, and the resulting economic consequences for firms and marginalized shareholders. Using quasi-experimental variations tied to media coverage of firms' annual general meetings, we find that shareholders support costly prosocial actions, such as covid-related donations and private sanctions on Russia, when these generate image gains. In contrast, shareholders that the public associates less to a specific firm, such as financial corporations with large portfolios, oppose such actions. These prosocial expenditures crowd out investments at exposed firms, reducing productivity and profits by 1 to 3%. Pursuing the values of some shareholders thus comes at a cost to others, which shareholders' monitoring motivated by heterogeneous preferences could mitigate. By highlighting the interplay between shareholder influence and firms' objectives, this study contributes to the broader debate on activism, showing how unobservable internal conflicts drive corporate responses to societal pressures.
• Caring or Pretending to Care? Social Impact, Firms' Objectives, and Welfare
  Journal of Political Economy, 2022, 130.11: 2898-2942
  Awards: Prix Malinvaud 2023 / Best Paper Award at EEA-ESEM 2018 / Media: carenews.com
  pdf (v: 02/2022) / gated / abstract
  Abstract: Many firms claim that "social impact" influences their strategies. This paper develops a structural model that quantifies social impact as the sum of surpluses to a firm and its stakeholders. With data from a for-profit firm whose prosocial expenditures are measurable and salient to consumers, the analysis shows that the firm spends prosocially beyond profit maximization, thereby increasing welfare substantially. Incentivizing a standard profit-maximizing firm to behave similarly would require subsidies amounting to 58% of its prosocial expenditures because consumers’ willingness to pay is relatively inelastic to prosocial expenses. Therefore, social impact resembles a self-imposed welfare-enhancing tax with limited pass-through.
• Performance Pay in Insurance Markets: Evidence from Medicare
  with Hongming Wang
  Review of Economics and Statistics, 2023, 105.5: 1128–1144
  Policy Research Award at INFER 2020 / Media: VoxEU
  pdf (v: 07/2021) / gated / abstract
  Abstract: Public procurement bodies increasingly resort to pay-for-performance contracts to promote efficient spending. We show that firm responses to pay-for-performance can widen the inequality in accessing social services. Focusing on the quality bonus payment initiative in Medicare Advantage, we find that higher quality-rated insurers responded to bonus payments by selecting healthier enrollees with premium differences across counties. Selection is profitable because the quality rating fails to adjust for differences in enrollee health. Selection inflated the bonus payments and shifted the supply of high-rated insurance to the healthiest counties, reducing access to lower-priced, higher-rated insurance in the riskiest counties.
• Greening Banks: Shareholders vs. Stakeholders
  with Andrea Andolfatto, Clément Mazet-Sonilhac and Jean-Stéphane Mésonnier
  abstract
  Abstract: What makes large banks shift towards financing the transition at the global scale? What roles do stakeholders (e.g., depositors, shareholders, and regulators) have? Is peer pressure, notably via the membership in voluntary coalitions for climate, an effective way to motivate banks to support the transition? This project investigates these questions using a unique combination of public and proprietary individual datasets, either at the level of a large European country (France) to study pressure on banks from local depositors or globally to study the role of other stakeholders and institutional investors. By exploiting local environmental NGO campaigns and participation in international environmental alliances, our project will provide new insights into the role of activists and peer pressure in boosting the green transition of financial institutions.
  Status: Awarded a CIVICA grant. Data analysis ongoing

Technologies & the Green Transition: Innovation Adoption, Production Technologies, and Environmental Implications

• Prices and Concentration: A U-shape? Theory and Evidence from Renewables
  with Junnan He and Jorge Tamayo
  HBS wp 25-049 / arXiv (v: 04/2025) / AOM Proceedings / abstract
  Abstract: We show that when firms compete via supply functions, transferring high-cost capacity to the largest, most efficient firm—thereby diversifying its production technologies while increasing concentration—can lower prices by prompting the leader to expand output and competitors to aggressively defend market shares. However, large transfers prove anticompetitive, as sizable capacity differences discourage price undercutting. Exploiting renewable intermittencies in Colombia’s electricity market, where firms are technology-diversified, we consistently find a U-shape relationship between prices and concentration. Counterfactually reallocating 30% of competitors' high-cost capacities to the leader cuts prices 10%, while larger transfers raise them, revealing how capacity and efficiency influence market power.
• Transferable Know-How: Evidence from the Upstream Oil & Gas Industry
  with Alessandro Iaria, Aljoscha Janssen, Clément Mazet-Sonilhac and Robert K. Perrons
  arXiv (v: 3/2025) / ssrn / abstract
  Abstract: We investigate the consequences of the adoption of Enhanced Oil Recovery (EOR) on productivity, competition, and further technological adoption in the upstream oil & gas industry in the North Sea. Exploiting geological heterogeneity and a Norwegian Supreme Court decision that reduced policy uncertainty, we show that early EOR adopters increased their productivity and gained shares of the North Sea market through three channels. First, direct productivity gains due to EOR adoption. Second, specialization by transferring the acquired know-how to other EOR-eligible fields. Third, diversification through know-how-driven economies of scope that facilitated investments in non-EOR-eligible fields requiring alternative technologies.
• Capturing Subsidies or Storing Carbon: Evidence from the North Sea
  with Alessandro Iaria, Aljoscha Janssen, Clément Mazet-Sonilhac and Robert K. Perrons
  abstract
  Abstract: Addressing climate change, carbon capture and storage technologies have emerged to reduce atmospheric CO2. While capture technologies have advanced, storage investment lags. Governments, like the US with its Inflation Reduction Act ($370bn), are introducing CO2 storage subsidies, with the upstream oil and gas sector (O&G) aiming to benefit by adopting Enhanced Oil Recovery technologies (EOR), a carbon storage technology increases recovery rates by injecting CO2 into reservoirs. Our research examines whether subsidies boost EOR adoption, its effects on competition and production, and its actual impact on CO2 emissions in the high-polluting O&G sector. Challenges include that unobservable firm characteristics can influence EOR adoption and the recent timing of these subsidies, precluding long term industry analyses. We will leverage a 1985 policy change promoting EOR in Norway but not the UK, stressing firms' responses to these subsidies by developing dirtier fields over 50 years of data.

Trade & IO: Pricing Along the Global Value Chain and Decentralized Markets

• Two-Sided Market Power in Firm-to-Firm Trade
  with Vanessa Alviarez, Ken Kikkawa and Monica Morlacco
  R&R at American Economic Review
  pdf (v: 12/2022) / NBER wp / abstract
  Abstract: We develop a quantitative theory of prices in firm-to-firm trade with bilateral negotiations and two-sided market power. Markups reflect oligopoly and oligopsony forces, with relative bargaining power as weight. Cost pass-through elasticities into import prices can be incomplete or complete, depending on the exporter's and importer's bargaining power and market shares. In U.S. import data, we find that U.S. importers have substantial market power and disproportionate leverage in price negotiations. The estimated model produces accurate predictions of the impact of Trump tariffs on pair-level prices. At the aggregate level, ignoring two-sided market power could exaggerate tariff pass-through by about 60%.
• Concentration and Markups in International Trade
  with Vanessa Alviarez, Ken Kikkawa and Monica Morlacco
  pdf soon / abstract
  Abstract: We study the relationship between industry concentration and aggregate markups in a model of firm-to-firm trade with two-sided market power. Theoretically, we show that the aggregate markup in an import market is a linear function of two concentration measures: it increases in the average Herfindhal index (HHI) of the exporters and it decreases in the average (modified) HHI of the importers in that market. We measure these concentration measures for Colombian imports during 2010-2020, show that they are correlated to aggregate import prices in ways predicted by the model, and discuss the implied evolution of aggregate markups. Compared to standard models where supplier concentration is the only relevant statistic, accounting for two-sided concentration and market power yields a richer picture around the evolution of aggregate markups in international trade.
  Presentations: ASSA 2023, AFSE 2023 (Sciences Po), CITP 2023 (Sussex), SED 2023
• Return to Scale in Decentralized Markets: Evidence from Mastodon
  with Mathias Dachert and Alessandro Iaria
  abstract
  Abstract: We study entry and business stealing in decentralized markets both theoretically and empirically by focusing on the social network Mastodon. A decentralized social network allows users to create different servers that communicates among each others like emails. Preliminary results find high levels of business stealing across Mastodon servers, which suggests a problem of excessive entry in decentralized network.
  Status: Ongoing data analysis.

Behavioral Economics: Eliciting Preferences

• Dynamic Regret Avoidance
  with Giorgio Coricelli and Sasha Vostroknutov
  AEJ: Microeconomics, 2022, 14.1: 70-93
  ssrn (v: 12/2020) / gated / abstract
  Abstract: In a stock market experiment we examine how regret avoidance influences the decision to sell an asset while its price changes over time. Participants know beforehand whether they will observe the future prices after they sell the asset or not. Without future prices participants are affected only by regret about previously observed high prices (past regret), but, when future prices are available, they also avoid regret about expected after-sale high prices (future regret). Moreover, as the relative sizes of past and future regret change, participants dynamically switch between them. This demonstrates how multiple reference points dynamically influence sales.
• Suboptimal Dishonesty: Rationality in the Absence of Strategic Behavior in Honesty Experiments
  with Sean Marden
  The Journal of Neuroscience, 2015, 35.5: 1817-1818
  pdf (v: 02/04/2015) / gated

Teaching

• Applied Data Analysis for Public Policy / Sciences Po, MPA / material
• Economics Module 1 (30667) / Bocconi / Undergraduate / Fall 2024 / syllabus / Blackboard
• The Economics of Industry / London School of Economics, MSc Economics / course guide
• Introduction to Econometrics (30284) / Bocconi / Undergraduate / Fall 2024 / syllabus / Blackboard
• Managerial Economics / Sciences Po, Master in International Business and Sustainability / syllabus
• Public Economics / Sciences Po, graduate
• Sustainable Businesses and Moral Markets / Sciences Po, graduate, Common Academic Curriculum / syllabus
• Topics in Economics / Sciences Po, MSc Economics

"Manuscripts don't burn" - M. Bulgakov