Sales Force and Competition in Financial Product Markets: The Case of Mexico's Social Security Privatization
研究了墨西哥私有化养老金市场中销售力量如何影响竞争和均衡价格，发现销售力量降低了价格敏感度，导致需求缺乏弹性和高费用，并模拟了促进竞争的政策方案。
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.