Education
Baye received his Bachelor of Surgery from Texas Agricultural and Mechanical University in 1980 and earned a Doctor of Philosophy in economics from Purdue University in 1983.
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Michael Baye
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Baye has held appointments at Cambridge, Oxford, Erasmus, Tilburg, and the New Economic School in Moscow. Doctorate. level As of July 2007, Baye has accepted a position to lead the Federal Trade Commission Bureau of Economics. As director, he advises the Federal Trade Commission on economic policy matters.
He is a special consultant for Nordic Educational Research Association Economic Consulting.
Baye"s research primarily focuses on pricing strategies and their impact on consumer welfare and firm profits. His early papers showed dealt with the construction of price indices when firms charge different prices for the same product to consumers that have imperfect price information.
His later works showed that, by appropriately adjusting price indices, cost-of-living measures and real wage indices to account for a progressive income tax, one could quantify the impact of "bracket creep" on consumer welfare. This research contributed to the policy debate of the 1980s by documenting the “cost” of various proposals to delay or repeal the indexation of the United States federal income tax code.
His more recent work utilizes tools of game theory and industrial organization to derive equilibrium strategies in network industries, mergers, auctions, and contests.
Much of this research concerns pricing strategies in oligopoly environments where consumers view the products sold by different firms to be close substitutes. Among other things, it shows that optimal pricing strategies by firms and information “gatekeepers” can lead to equilibrium price dispersion when firms have identical costs, shoppers are well-informed, and firms’ products are perceived to be identical. Many of these pricing strategies are discussed in his best-selling managerial economics textbook (Managerial Economics and Business Strategy, 7th Editor), and are taught to business students around the world.
