About

Ariel Pakes is the Thomas Professor of Economics at Harvard University. His professional profile is associated with the Department of Economics at Harvard, located in Littauer Room 117, Cambridge, MA. His contact information includes a phone number, 617-495-5320, and an email address, apakes@fas.harvard.edu. The page indicates his involvement in academic activities such as courses, publications, presentations, and research insights, and references a specific algorithm, the Pakes-McGuire Algorithm. The content emphasizes his academic role and contributions within the field of economics, but does not provide detailed information about his research focus, background, or key contributions.

Research topics

• Computer Science
• Artificial Intelligence
• Microeconomics
• Economics
• Psychology

Selected publications

• Pharmaceutical Advertising in Dynamic Equilibrium

  SSRN Electronic Journal · 2026-01-01

  preprintOpen accessSenior author
  PublisherDOI

• Policy options for the drug pricing conundrum

  Proceedings of the National Academy of Sciences · 2025-02-25 · 4 citations

  articleOpen accessSenior authorCorresponding

  Current proposals aimed at reducing U.S. pharmaceutical prices would have immediate benefits (particularly for low-income and elderly populations), but could dramatically reduce firms' investment in potentially highly welfare-improving Research and Development (R&D). The United States subsidizes the worldwide pharmaceutical market: U.S. drug prices are more than 250% of those in other Organization for Economic Co-operation and Development (OECD) countries. If each drug had a single international price across the highest-income OECD countries and total pharmaceutical firm profits were held fixed: U.S. prices would fall by half; every other country's prices would increase (by 28 to over 300%); and R&D incentives would be maintained. We propose a potential lever for the U.S. government to influence worldwide drug pricing: access to the Medicare market.

  PublisherOA PDFDOI

• Policy Options for the Drug Pricing Conundrum

  National Bureau of Economic Research · 2024-06-01 · 1 citations

  reportOpen accessSenior author

  Current proposals aimed at reducing U.S. pharmaceutical prices would have immediate benefits (particularly for low-income and elderly populations), but are likely to dramatically reduce firms’ investment in highly welfare-improving R&D. The U.S. subsidizes the worldwide pharmaceutical market: U.S. drug prices are more than 250% of those in other OECD countries. If each drug had a single international price across the highest-income OECD countries and total pharmaceutical firm profits were held fixed: U.S. prices would fall by half; every other country’s prices would increase (by 28 to over 300%); and R&D incentives would be maintained. We propose a potential lever for the U.S. government to influence worldwide drug pricing: access to the Medicare market.

  PublisherDOI

• Moment inequalities for multinomial choice with fixed effects

  Quantitative Economics · 2024-01-01 · 9 citations

  articleOpen access1st authorCorresponding

  This paper proposes a new approach to identification of the semiparametric multinomial choice model with fixed effects. The framework employed is the semiparametric version of the traditional multinomial logit with the fixed‐effects model (Chamberlain (1980)). This semiparametric multinomial choice model places no restrictions on either the joint distribution of the random utility disturbances across choices or their within group (or across time) correlations. We show that a novel within‐group comparison leads to a set of conditional moment inequalities. Our main finding shows that the derived conditional moment inequalities yield the sharp identified set for the random utility covariate index, while avoiding the incidental parameter problem. Specializing this result to the binary choice case shows that Manski (1987)'s conditional moment inequalities still lead to sharp bounds without restrictions on covariates.

  PublisherOA PDFDOI

• Evaluating Pharmaceutical Policy Options

  SSRN Electronic Journal · 2024-01-01

  articleOpen accessSenior author
  PublisherDOI

• The impact of artificial intelligence design on pricing

  Journal of Economics & Management Strategy · 2023 · 41 citations

  Senior authorCorresponding
  • Computer Science
  • Artificial Intelligence
  • Computer Science

  Abstract The behavior of artificial intelligence (AI) algorithms is shaped by how they learn about their environment. We compare the prices generated by AIs that use different learning protocols when there is market interaction. Asynchronous learning occurs when the AI only learns about the return from the action it took. Synchronous learning occurs when the AI conducts counterfactuals to learn about the returns it would have earned had it taken an alternative action. The two lead to markedly different market prices. When future profits are not given positive weight by the AI, (perfect) synchronous updating leads to competitive pricing, while asynchronous can lead to pricing close to monopoly levels. We investigate how this result varies when either counterfactuals can only be calculated imperfectly and/or when the AI places a weight on future profits. Lastly, we investigate performance differences between offline and online play.

  PublisherOA PDFDOI

• On the misuse of regressions of price on the HHI in merger review

  Journal of Antitrust Enforcement · 2022-04-21 · 28 citations

  articleOpen access

  Abstract The article explains why regressions of price on HHI should not be used in merger review. Both price and HHI are equilibrium outcomes determined by demand, supply, and the factors that drive them. Thus, a regression of price on the HHI does not recover a causal effect that could inform the likely competitive effects of a merger. Nonetheless, economic theory is consistent with the legal presumption that a merger is likely to have adverse competitive effects if it occurs in a concentrated market and makes that market more concentrated.

  PublisherOA PDFDOI

• Artificial Intelligence, Algorithm Design, and Pricing

  AEA Papers and Proceedings · 2022 · 79 citations

  Senior authorCorresponding
  • Computer Science
  • Computer Science
  • Artificial Intelligence

  We calculate the time path of prices generated by algorithmic pricing games that differ in their learning protocols. Asynchronous learning occurs when the algorithm only learns about the return from the action it actually took. Synchronous learning occurs when the artificial intelligence conducts counterfactuals to learn about the returns it would have earned had it taken an alternative action. In a simple market setting, we show that synchronous updating can lead to competitive pricing, while asynchronous updating can lead to pricing close to monopoly levels. However, building simple economic reasoning into the asynchronous algorithms significantly modifies the prices it generates.

  PublisherDOI

• Artificial Intelligence and Pricing: The Impact of Algorithm Design

  SSRN Electronic Journal · 2021-01-01 · 9 citations

  preprintOpen accessSenior author
  PublisherDOI

• Moment Inequalities and Partial Identification in Industrial Organization

  National Bureau of Economic Research · 2021-10-01 · 3 citations

  preprintOpen access

  We review approaches to identification and inference on models in Industrial Organization with partial identification and/or moment inequalities. Often, such approaches are intentionally built directly on assumptions of optimizing behavior that are credible in Industrial Organization settings, while avoiding the use of strong modeling and measurement assumptions that may not be warranted. The result is an identified set for the object of interest, reflecting what the econometrician can learn from the data and assumptions. The chapter formally defines identification, reviews the assumptions underlying the identification argument, and provides examples of their use in Industrial Organization settings. We then discuss the corresponding statistical inference problem paying particular attention to practical implementation issues.

  PublisherOA PDFDOI

Frequent coauthors

• Ulrich Doraszelski

  University of Pennsylvania

  59 shared

• Steven Berry

  57 shared

• Gregory Lewis

  University of Ontario Institute of Technology

  57 shared

• Chaim Fershtman

  33 shared

• Zvi Griliches

  21 shared

• Kate Ho

  20 shared

• Elie Tamer

  19 shared

• Samuel Kortum

  Yale University

  18 shared

Education

• Ph.D., Economics

  Harvard University

  1985

• B.A., Economics

  University of California, Berkeley

  1979

Awards & honors

• Fellow of the American Academy of Arts and Sciences (2002)
• Frisch Medal of the Econometric Society (1986)
• Fellow of the Econometric Society (1988)
• Best graduate student advisor at Yale (1996)