Dissertations / Theses on the topic 'Industrial economics'

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2008.
Includes bibliographical references.
This dissertation consists of three chapters in Industrial Economics. Chapter 1 is the product of joint work with Filippo Balestrieri. In chapter 1 we examine the use of lotteries among horizontal differentiated goods as a mechanism to price discriminate consumers. We use the linear city model to represent a market with two differentiated goods. We show that the optimal selling strategy for a multi product monopolist implies offering at least one lottery with probability 1/2. This result is in stark contrast with the the optimal selling strategy of a single product monopolist that attempts to price discriminate consumers based on the probability of delivering the good. Riley and Zeckhauser (1983) show that the single good monopolist does not offer lotteries. We then examine the use of lotteries among the differentiated goods in the case of a market with two competing firms, each one producing one good. We define two different cases depending on whether the market is fully covered. We call fully covered market the case in which the equilibrium prices of the two firms are such that all consumers buy one good. We show that if the market is fully covered, no lotteries are offered in equilibrium. However, when the market is not fully covered the optimal selling strategy may include offering lotteries. With more than two firms selling differentiated goods, even in a fully covered market, lotteries can be used in equilibrium. In this case, firms might be worse off than in the case where no lotteries are provided. Chapter 2 examines firms optimal pricing policy when they sell a storable good of repeated consumption to time-inconsistent consumers. Consumers with time-inconsistent preferences might struggle to make optimal consumption decisions over time. Sophisticate consumers, aware of their time-inconsistent preferences, often try to limit their consumption of certain goods by strategically rationing the quantities they purchase.
(cont.) On the other hand, naive consumers, unaware of their time-inconsistent preferences, may stockpile tempting goods at "home" not realizing that the higher availability of the good might lead them to overconsume the good.It is shown that if consumers are time-consistent, quantity discounts don't increase the firms' profit. In contrast, if firms face naive time-inconsistent consumers, the optimal pricing policy is to use small quantity discounts as a device to increase sales. These consumers take advantage of quantity discount with the intention of saving on future purchases. However, after buying the good they can not resist and overconsume it. We also show that even if consumers are sophisticated, firms still use quantity discounts. Sophisticated time-inconsistent consumers realize that increasing the quantity purchased often leads them to overconsume the good. Hence, they require a significant quantity discount to increase the quantity purchased. Offering a quantity discount leads them to stockpile the good "at home" and hence promotes overconsumption. Chapter 3 analyzes the use of exclusive dealing agreements to prevent the entry of rival firms. An exclusive dealing agreement is a contract between a buyer and a seller where the buyer commits to buy a good exclusively from the seller. Exclusive dealing agreements are one of the most common vertical restraints used by firms. Aghion and Bolton (1987) were the first to show that an incumbent seller may want to use exclusive dealing agreement that prevents the entry of a rival seller. They argue that an incumbent seller and a buyer sign an exclusive dealing contract in order to extract surplus from a more efficient entrant seller.
(cont.) We propose an alternative explanation for the use of exclusive dealing agreements to prevent entry when the buyer is a downstream distributor that also faces the threat of entry. The idea is that the entry of more efficient upstream seller, by decreasing the market power of the upstream firms, makes entry in the downstream market more attractive. This can lead to further entry in the downstream market and to an increase in the competition faced by the downstream firms. Since part of the bigger surplus created by the entry of a more efficient seller is captured by the downstream entrant firms, entry in the upstream market does not necessarily benefits the incumbent downstream firms.
by Joao Leao.
Ph.D.

La tesi si compone di due progetti indipendenti. Il primo utilizza la metodologia real options per l'analisi delle politiche per lo sviliuppo di nuovi impianti rinnovabili. Propongo uno schema a sussidi crescenti nel tempo ed un price cap, di modo da aumetare la velocità di sviluppo di nuova capacità di produzione e contenere la spesa. Il secondo paper invece rappresenta il comportamento anticompetitivo di un'impresa digitale, un intermediario di dati, che estrae informazioni dai consumatori ed in seguito le alloca startegicamente presso le imprese, consentendo loro di offrire prezzi personalizzati. Inoltre l'intermediario riesce a sfruttare gli effetti di scala tipici delle tecnologie di produzione dei dati, per consolidare la sua posizione monopolistica.
The thesis consists of two independent projects. The first uses the real options methodology for the analysis of policies for the development of new renewable plants. I propose a subsidy scheme that increases over time and a price cap, in order to increase the speed of the development of new production capacity and contain spending. The second paper, on the other hand, represents the anti-competitive behavior of a digital company, a data intermediary, which extracts information from consumers and subsequently allocates it strategically to product firms, allowing them to offer personalized prices. Furthermore, the intermediary is able to exploit the scale effects, typical of data production technologies, to consolidate its monopolistic position.

Orientador: Rogério Gomes
Coorientador: José Ricardo Fucidji
Banca: José Eduardo de Salles Roselino Junior
Banca: Eduardo Strachman
Resumo: O presente trabalho é dividido em dois artigos. O primeiro tem como objetivo lançar mão a uma nova tipologia para as políticas industriais, elencando quatro tipos essenciais de política. Nesses quatro tipos estão dispostos os principais referenciais teóricos a respeito do tema. Essa forma de sistematização tornará a tarefa de análise e classificação das políticas industriais mais simples. Além disso, é feita uma breve revisão do papel do Estado Brasileiro no processo de industrialização nacional para ilustrar a importância da boa formulação e implantação de políticas industriais para o desenvolvimento do Brasil. O segundo artigo tem como objetivo fundamental o de mapear o debate atual a respeito do que se entende por política industrial verde. Para tanto, uma revisão da literatura internacional sobre o tema foi feita com vistas a 1) enquadrar teoricamente os principais conceitos tratados quando se discute políticas industriais verdes e 2) a partir da literatura examinada, lançar luz sobre a recente experiência brasileira no desenho de políticas industriais, mais especificamente com relação à PITCE, à PDP e ao PBM.
Abstract: This dissertation is divided into two articles. The first one aims at launching a new typology for industrial policies, listing four essential types of policy. Within these four types are available the main theoretical references on the subject. This form of systematization will make the task of analysis and classification of industrial policies simpler. In addition, a brief review of the role of the Brazilian State in the process of national industrialization is made to illustrate the importance of good formulation and implementation of industrial policies for the development of Brazil. The second article has as its fundamental objective to map the current debate regarding what is meant by green industrial policy. To do so, a review of the international literature on the subject was made with a view to 1) theoretically frame the main concepts treated when discussing green industrial policies and 2) from the literature examined, shed light on the recent Brazilian experience in policy design Particularly with regard to PITCE, PDP and PBM.
Mestre

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2013.
Cataloged from PDF version of thesis.
Includes bibliographical references (p. 189-201).
The first chapter quantifies the efficiency of a real-world bargaining game with two-sided incomplete information. Myerson and Satterthwaite (1983) and Williams (1987) derived the theoretical efficient frontier for bilateral trade under two-sided uncertainty, but little is known about how well real-world bargaining performs relative to the frontier. The setting is wholesale used-auto auctions, an $80 billion industry where buyers and sellers participate in alternating-offer bargaining when the auction price fails to reach a secret reserve price. Using 300,000 auction/bargaining sequences, this study nonparametrically estimates bounds on the distributions of buyer and seller valuations and then estimates where bargaining outcomes lie relative to the efficient frontier. Findings indicate that the observed auction-followed-by-bargaining mechanism is quite efficient, achieving 88-96% of the surplus and 92-99% of the trade volume which can be achieved on the efficient frontier. This second chapter examines a common form of entry restriction: occupational licensing. The chapter studies how occupational licensing laws affect the distribution of quality and how the effects of licensing on quality vary across regions of differing income levels. The study uses variation in state licensing requirements for teachers and two national datasets on teacher qualifications (input quality) and student test scores (output quality) from 1983-2008. Results show that more restrictive licensing may lead first-year teachers of high input quality to opt out of the occupation. For teachers who remain in the occupation longer, stricter licensing increases input quality at most quantiles. The distribution of student test scores increases with stricter licensing, primarily in the upper half of the distribution. For most forms of licensing studied, input and output quality improvements due to stricter licensing occur in high-income rather than low-income districts. The third chapter (co-authored with Denis Chetverikov and Christopher Palmer) proposes a simple approach for estimating distributional effects of a group-level treatment when there are unobservable components at the group level which may be correlated with the treatment. Standard quantile regression techniques are inconsistent in this setting, while grouped instrumental variables quantile regression is consistent. The study illustrates the estimation approach with several examples, including applications from the first two chapters of this thesis.
by Bradley Joseph Larsen.
Ph.D.

Dans le premier chapitre, co-écrit avec James Hammitt, nous proposons une relation théorique entre la propension à payer entre la réduction de petits risques de mortalité, la réduction de risques, la probabilité de survivre et le revenu. En plus, nous proposons une valeur de la vie statistique qui prend en compte la qualité des réponses. En utilisant une enquête de préférences déclarées dirigée à un échantillon représentatif de la population française nous explorons de combien et pourquoi les répondants s'éloignent des prédictions de la théorie de l'utilité espérée. On trouve que 40% des répondants se comporte comme la théorie d’utilité espérée prédit. Nos spécifications préférées estiment une valeur statistique de la vie entre 2.2 et 3.4 millions d’euro pour un adulte et 6 millions d’euro pour un enfant. Le deuxième chapitre s'intéresse à l'impact d'une campagne d'information de santé publique en France sur le comportement d'achat des consommateurs. Les motivations économiques derrière l'intervention publique dans le domaine de la santé et la nutrition sont partiellement soutenues par l'idée que les consommateurs ne disposent pas de l'information suffisante pour la prise d'une bonne décision. Dans cet article je prends comme étude de cas les maladies de tubes neurales, une maladie neurologique qui affecte 1 sur 1000 nouveaux née en France chaque année. J'utilise une méthode quasi expérimentale pour mesurer l'impact de la campagne d'information française sur la consommation d'acide folique à l'aide d'une approche réduite. Je combine une base de données très détaillée concernant les achats de nourriture avec une base de données de macro et micro nutriments. La stratégie d'identification consiste à exploiter la variation dans la nécessité de l'information concernant l'acide folique parmi les foyers: ceux qui sont en train de concevoir un bébé ou qui désirent en concevoir l'utilisent, tandis que ceux qui ne sont pas en train de concevoir ne l'utilisent pas. En outre, je fais une estimation structurelle de la demande de nourriture et de nutriments afin de capturer les changements potentiels des préférences qui auraient été causées par l'intervention. Les résultats suggèrent que la campagne d'information a eu un impact positif sur les préférences d'acide folique des foyers en risque et qu'elle a aidé à augmenter la disponibilité d'acide folique dans ces foyers. Finalement, en collaboration avec Jorge Florez-Acosta, nous identifions les coûts d'achat des consommateurs à l'aide d'une approche structurelle en utilisant une base de données des achats de nourriture des foyers français. Les coûts d'achat représentent les coûts réels ou perçus de visiter un nouveau magasin. Nous présentons un modèle de demande pour des magasins et des biens multiples qui représentent le problème d'optimisation du nombre de visite en termes de coûts d'achat individuels. Cette règle détermine si un consommateur visiterait un ou plusieurs magasins durant une période d'achat déterminée. Ensuite, nous estimons les paramètres du modèle et la distribution des coûts d'achat. Nous quantifions les coûts d'achat moyens par magasin visité. Ces coûts ont deux composantes : un coût moyen d'achat fixe et un coût moyen de transport par déplacement. Nous montrons que les consommateurs en capacité de visiter trois ou plus de magasins ont des coûts d'achat inférieurs à zéro, ce qui explique la faible proportion de consommateurs visitant trois ou plus de magasins présents dans notre base de données. Une fois les coûts d'achat sont pris en compte, la théorie montre que des pratiques, supposé, pro-concurrentiel peuvent réduire le bien-être et motiver l'intervention publique. Tels résultats théoriques n'ont toujours pas été testés empiriquement. Cet article représente un premier pas dans cette direction
Le résumé en anglais n'a pas été communiqué par l'auteur

Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management, 2010.
"June 2010." Cataloged from PDF version of thesis.
Several years ago, Professor Robert Pindyck of the MIT Sloan School of Management created an oligopoly strategy game for use in his course 15.013: Industrial Economics for Strategic Decisions. This game divided the class up into "firms" (generally consisting of two students each) and randomly formed industries, each consisting of three firms. Students competed throughout the semester in a fictitious market for a heterogeneous good, each firm providing price and production inputs on a weekly basis. The purpose of the game was to provide a hands-on tool to teach students how industry competitors interact, and how forces such as signaling, collusion, demand fluctuations, and emotion affect industry and firm performance. Although the game was carried out successfully for several years, issues surfaced over time. In particular, the Excel model used to run the weekly calculations was set up awkwardly and was therefore difficult to use. Additionally, the memo distributed to students to explain the game was disorganized, lacked sufficient examples, and contained errors. Finally, Professor Pindyck desired to implement the game in other courses with other professors, and this was not possible without a thorough document containing instructions for running the game as well as in-depth background information on the theory behind the calculations. The work carried out for this thesis aimed to fix these problems. Specifically, I rebuilt the Excel model to operate in a simpler and more user-friendly fashion. Additionally, I revised the student memo to rectify the issues described above. Finally, I created a new manual to allow professors and TAs run the game in their courses.
by Timothy C. Daniels
M.B.A.

This thesis consists of three essays each studying insurance markets from a different perspective. The first studies competition in the domestic Finnish non-life insurance market using a persistence of profits model, where it is assumed that firms use competitors' past profits as signals of attractiveness of given submarkets. The firms were divided into two strategic groups. The existence of these groups, the effects of two mergers, and the level of competition were tested for. It emerged that the groups compete hard against each other, that fringe firms compete more with the leader group than with each other, that leaders' either follow some kind of tacit collusion strategy or compete very aggressively against each other, and that the mergers lead to a tightening of competition. The second essay is theoretical. The question asked is: does it pay for an insurance firm to acquire information of its customers' type and level of effort. Adverse selection and moral hazard analyses are combined, using geometric tools. Welfare analysis is central in this essay. Decision rules are derived for a monopoly to become vertically integrated. It is shown that in oligopoly it is possible to have an equilibrium where firms use asymmetric vertical strategies. Welfare effects of vertical integration prove to be ambiguous. The model has several other applications, eg. job market, organization of regulatory institutions. In the third essay it is argued that oligopolistic firms do not necessarily minimize costs when maximizing profits, and that this affects cost function specification and estimation. A cost function is constrained so that it can be estimated even though the number of products is large. The proposed specification gives a better fit them traditional specifications, and the quantitative and qualitative results are very different. The costs of branch proliferation are calculated, and the lowest mean for five biggest firms is 37% of total operating costs.

This dissertation consists of three essays in the area of Industrial Organization. The first essay established the theoretical motivations for, and implications of, exclusive contracts, with an application to smartphones. Why would Apple choose to distribute its smartphone through only one carrier, and why would AT&T bid the most for exclusivity? I develop a model which shows that if upstream handset manufacturers face a relatively low price elasticity for their good compared to downstream wireless carriers, exclusive contracts can maximize their joint profits. An exclusive contract reduces price competition in the final good market but also increases returns to innovation for parties outside the contract, such as Google’s Android. Different price elasticities among downstream firms due to network quality differences lead to different valuations of the exclusive contract. The second essay estimates the relative elasticities of smartphone and carrier demand using simulation and MCMC methods on a detailed monthly dataset of consumer decisions over 2008-2010. Counterfactual simulations show the importance of recomputing the price equilibrium to understanding the observed market structure. Accounting for price effects, AT&T had the highest value of exclusivity with Apple, and was willing to compensate Apple $148 per unit sale foregone. Apple’s exclusivity increased entry incentives for Android handset makers by approximately $1B. The third essay uses data on US newspapers from the early 20th century to study the economic incentives that shape ideological diversity in the media. My co-authors and I show that households prefer newspapers whose political content agrees with their own ideology, that newspapers with the same political content are closer substitutes than newspapers with different political content, and that newspapers seek both to cater to household tastes and to differentiate from their competitors. We estimate a model of newspaper demand, entry, and affiliation choice that captures these forces. We show that competitive incentives greatly enhance the extent of ideological diversity in local news markets, and we evaluate the impact of policies designed to increase such diversity.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2018.
Cataloged from PDF version of thesis.
Includes bibliographical references (pages 93-95).
This thesis consists of three empirical essays in industrial organization. The first chapter examines the welfare effects of intertemporal price discrimination in market for airfare using a novel structural model of dynamic consumer search. I model how consumers search for airline tickets over time using data gathered from an internet travel agent. My model features sophisticated consumers with rational beliefs about future price movements who make optimal decisions based on their beliefs. Using data on daily price and quantity in monopoly markets, I estimate the demand for airfare and calculate consumer welfare. I compare welfare to a counterfactual market in which airlines cannot price discriminate. The second chapter quantifies the impact of company-wide incentive plans on total company performance. I identify five airlines that have introduced employee incentive programs that offer monthly bonuses to all company employees as long as the company achieves a certain performance level in flight on-time performance. I present evidence that these programs are effective at increasing employee performance in spite of the temptation to be a free rider. My analysis uses Mahalanobis matching to compare each route's performance with the best matching control flight, taking advantage of the large volume of flight data available. In the third chapter I examine the role of reputation in an online marketplace that specializes in unreliable products. Using data gathered from video game resale platform G2A, I examine how buyers and sellers utilize the wide array of reputation information available. I find that buyers on this platform have an understanding of their probability of encountering a negative transaction and will utilize more reputation information in less reliable markets.
by David Liu.
Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017.
Cataloged from PDF version of thesis.
Includes bibliographical references.
This thesis consists of three chapters on information transmission and utilization in marketplaces and their implications on firm competition and quality discovery. The first chapter analyzes the dynamic effect of sponsored search advertising on quality discovery on the Taobao.com retail platform. In a stylized model, a new product's boosted exposure from sponsored search ads could help the platform to infer how well the product converts exposure to sales (the quality measure) and award top organic search ranks accordingly. Hence, sellers with higher private quality signals would bid more aggressively for sponsored ads, which accelerates the platform's discovery of these high-quality products. An empirical analysis echoes the stylized model and reveal a synergy between the platform's PC and mobile interfaces. The second chapter (co-authored with Sara Fisher Ellison and Christopher M Snyder) studies price dynamics for computer components sold on a price-comparison website. We estimate a dynamic model of competition, backing out structural estimates of managerial frictions. The estimated frictions are substantial, concentrated in the act of monitoring market conditions rather than entering a new price. Coupled with supporting reduced-form statistical evidence, our analysis provides a window into the process of managerial price setting and the microfoundation of pricing inertia, issues of growing interest in industrial organization and macroeconomics. The third chapter analyzes the revelation of hard information in a buyer-seller relationship. The seller can choose whether and when to credibly reveal quality information and some buyers, called prosumers, have greater taste for quality than others. This paper first analyzes an alternating bargaining game allowing endogenous delay between communications in the fashion of Admati and Perry(1987), and constructs an equilibrium with delayed revelation of quality. The paper then analyzes an informed principal problem and found that under certain conditions, both seller types choose the same truth-telling mechanism that maximizes the revenue of the seller type with high quality. In both games, a high quality seller hides his quality information before the buyer acts in order to extract surplus from prosumers.
by Hongkai Zhang.
1. Accelerated Quality Discovery through Sponsored Search Advertising in Online Marketplaces -- 2. Costs of Managerial Attention and Activity as a Source of Sticky Prices: Structural Estimates from an Online Market -- 3. Keeping Good Quality as a Surprise.
Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2015.
Title as it appears in MIT Commencement Exercises program, June 5, 2015: Essays on industrial organization Cataloged from PDF version of thesis.
Includes bibliographical references.
The first chapter investigates the effects of technological advances on the retail gasoline market. Since 2008, a Korean government website has posted daily prices of all gasoline stations. Combined with the rapid increase of smartphone and mobile technologies, this price information service may have changed the consumer search environment significantly. Using daily price data, sales data, and regional smartphone penetration rates, I find that price dispersion among gasoline stations and markups increase slightly when the smartphone penetration rate increases, even while additional descriptive evidence suggests that demand is becoming more price-sensitive. Structural estimation of a two-type consumer search model finds that the proportion of highly informed consumers increases as the smartphone penetration rate increases. A counterfactual analysis confirms that observed price changes are consistent with theoretical models of pricing, given the structurally estimated parameters. The second chapter studies consumer decisions at gasoline pumps, using a detailed transaction level dataset. About 36% of regular gasoline consumers chose to simply fill up, while the remaining 64% of consumers spent pre-selected dollar amounts. Descriptive analyses show that consumers become more active in quantity choices at gasoline pumps, and less likely to simply fill up, when retail prices are on an upward trend and when the current price level is unexpectedly high. Reduced-form results suggest that consumers expect that gasoline prices tend to move to the average price over time. The third chapter analyzes the effects of ability grouping on the academic performance of high school graduating students in Korea. About half of the regions in Korea have adopted an equalization policy (EP), which means that students are randomly assigned. For the other non-EP regions, students are sorted among schools based on ability levels. I utilize a difference-in- differences strategy to exploit the adoption of the EP, an exogenous policy shift. I find that after the EP, performance of students above the median dropped 1.4% in terms of national percentiles, while that of students below the 30% percentile jumped 1.3%. In addition, there was an increasing trend in the achievement levels in the treatment regions, but after the introduction of the EP, this trend vanished.
by Youngjun Jang.
Chapter 1. The Chapter 2. Chapter 3. effect of the Internet and Mobile Search Technologies on Retail Markets : Evidence from the Korean Gasoline Market -- How Do Consumers React to Price Movements? : Evidence from Consumers Filling Up Their Cars -- Ability Grouping and Student Achievement : Effects of the Equalization Policy in Korea
Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, September, 2020
Cataloged from student-submitted PDF of thesis.
Includes bibliographical references (pages 192-200).
This thesis is a collection of three chapters that investigate burgeoning empirical issues in industrial organization. In the first chapter, I study platform fee policy with a specific focus on two-sided online marketplaces. The main contributions of the paper are threefold. First, I study a setting with coordinated price experimentation along the three different fee dimensions that are common to such marketplaces. Second, I describe the empirical impact of incomplete fee salience on equilibrium outcomes. Finally, I quantify the network externalities that must be present in order for observed fees to constitute an equilibrium. In the paper, I begin by developing a tractable model of the platform's problem that generates testable predictions and yields equilibrium conditions in terms of estimable quantities. Then, using estimates from experimental data obtained from a large online marketplace, I quantify the salience and network effects.
To conclude, I consider the counterfactual level and composition of equilibrium platform fees under when these effects are muted or absent. In the second chapter, using data from the same source as in chapter one, I study small sellers competing on the supply side of online marketplaces. As these platforms grow and markets become increasingly disintermediated, an important concern is whether small sellers, who may have limited experience or attention, can individually compete effectively with larger, often professional sellers operating on the same marketplaces. To answer this question, I develop and estimate a structural model that incorporates essential features of the empirical setting, including large and rapidly changing choice sets and buyer heterogeneity. Using the estimated model, I compute optimal pricing policies under various informational and computational restrictions.
I find that small sellers adhering to a simple strategy can obtain nearly optimal expected revenue and that this strategy's information requirements are easily satisfied in the online setting. Additionally, I present suggestive evidence that sellers learn to approximate such a strategy through repeated market interactions. In the third and final chapter, I investigate the industrial impacts of firm control rights, which confer discretion over firm policy and are usually shared between debt and equity holders. Control rights operate along a continuum and are difficult to measure. As a proxy, I consider the discontinuous shift in control from equity holders to creditors due to loan covenant violations, a common form of technical default. This paper contributes to the growing covenants literature in two ways. First, I consider the impact of and response to covenant violations at the industry level, inclusive of firms never in technical default.
Second, I empirically document the effects of violations on contemporary product markets. I find that control rights transfers to creditors make firms tough in product markets, consistent with the predictions of a stylized model, and that markups decline at the industry level, though the declines are sharpest for firms directly affected.
by Samuel Isaac Grondahl.
Ph. D.
Ph.D. Massachusetts Institute of Technology, Department of Economics

This thesis is composed by three different studies on oligopolies. The first chapter is on oligopolies with perfect complements; the second chapter studies oligopolies with positive network effects and incompatible networks, and the last one deals with a polluting duopoly subject to environmental regulation. Specifically, the first chapter provides a thorough characterization of the properties of Cournot's complementary monopoly model (or oligopoly with perfect complements) in a general setting, including existence, uniqueness and the comparative statics effects of entry. As such, this serves to unify various results from the extant literature that have typically been derived with limited generality. Several studies have suggested that Cournot's complementary monopoly model is the dual problem to the standard Cournot oligopoly model. This result crucially relies on the assumption that the firms have no production costs. The first chapter shows that if the production costs of the firms are different from zero, the nice duality between these two oligopoly settings breaks down. One implication of this breakdown is that, in contrast to the Cournot model, oligopoly with perfect complements can be a game of strategic complements in a global sense even in the presence of production costs. The second chapter models symmetric oligopolies with positive network effects where each firm has its own proprietary network. That is, each firm's network is incompatible with that of its rivals. This chapter provides minimal conditions for the existence of (non-trivial) equilibrium in a general setting; in this model, the equilibria may be either symmetric or asymmetric. For the symmetric equilibria, this chapter analyzes the comparative statics effects of entry. In addition, it compares the equilibrium outcomes of oligopoly markets with compatible and incompatible networks. It shows that firms with compatible networks produce higher quantities than firms with incompatible networks. However, the relationship between prices, profits and consumer surplus is ambiguous, but social welfare is always higher in markets with completely compatible networks. Finally, the third chapter analyzes the incentives to invest in R&D under two environmental policy instruments: the emission and performance standards, in a Cournot model of competition between two symmetric firms. These firms are subject to environmental regulations as their production of a homogeneous good entails pollution. Unlike a few models of output market available in the literature, this approach does not measure the environmental incentives using firms' aggregate cost savings. Instead, it compares the levels of social welfare obtained under both policy instruments. From the derived subgame perfect equilibria of the two games, each game associated with a different instrument, this chapter shows that social welfare under performance standard dominates that under emission standard. It also finds that further comparisons, in particular, the comparison of the investment in R&D, are ambiguous and not aligned with the welfare comparison.

This study was designed to measure the firm's capacity to produce more output from a given bundle of inputs. That is, the nature of economies of scale that obtains in the manufacturing industrial aggregate. The data on which this study is based was obtained primarily from two sources: (1) The Fourth National Development Plan (1981-85) of Nigerian Publication; and (2) The 1979 issue of the Yearbook of Industrial Statistics published by the United Nations.

This thesis set out to explore the forces that determine the rise and fall of industrial leadership. It attempted to do this by applying an industry life cycle model to the shipping industry. The industrial life cycle was posited on the basis of existing literature, particularly the growth of knowledge, evolutionary and institutional literature, which lend themselves to patterns of industrial growth and entrapment. On this basis, this thesis set out to examine whether industrial leadership can be explained by a four-staged process of imitation, catch up, advance and entrapment. However, this thesis has exposed something more complicated. Processes of imitation, catch up advance and entrapment were shown to be at work in the shipping industry, but they were tempered by the effects of military and political forces that may not be exogenous, and the trend from regionalism to globalisation. The original model did not encompass early indigenous developments that are not based on imitation that do not immediately lead to a position of advanced leadership. In this light, a better description of the first stage would be capability building.

Despite its importance in national income, the level of activity in the construction sector has received little attention in the economics literature. The lack of studies attempting to forecast construction activity is surprising given that its volatility is often regarded as destabilising to the economy. Here, we model an important and growing component of construction, namely private industrial and commercial building. Construction activity is typically measured by output. To the extent that new construction output represents capital formation, output can be modelled as an investment problem. The theoretical investment literature is disparate and confusing but here, the leading models are presented in a unified framework in which the similarities and differences between them can be easily identified. We then go on to estimate a number of the models empirically. Some are econometric models consistent with traditional theories of investment. Others are based on vector autoregression (VAR) analysis which provides a largely statistical representation of a set of variables with minimum use of a priori restrictions but in which long-run relationships are preserved. The data required for model estimation is considerable and complicated by the effects of investment incentives embodied in the tax system. The forecasting performance of all the models is evaluated against forecasts generated by a benchmark model suggested by the data rather than by economic theory. In terms of forecasting performance, some of the investment models considered here are shown to be superior to the benchmark model.

This dissertation comprises three essays on industrial organization. The first essay studies how product-level entry and exit decisions impact business and public policy analysis. It provides an empirical model that incorporates these decisions and then estimates it in the context of the commercial vehicle segment of the US automotive industry. Finally, it demonstrates the importance of accounting for product-level changes using the $85 billion decision to rescue two US automakers in 2009. The second essay studies how two period strategies perform relative to Markov perfect strategies in discrete dynamic games. In particular, it considers a simple entry/exit game and shows that agents sacrifice very little in terms of expected discounted payoffs when they employ these simpler strategies. It also shows this result is robust to varying the underlying market characteristics. The third essay estimates the causal impact of research expenditures on scientific output. Unexpected college football outcomes provide exogenous variation to university funds, and in turn, research expenditures in the subsequent year. Using this variation, it estimates the dollar elasticity of scholarly articles, new patent applications, and the citations that accrue to each.
Business Economics

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2005.
Includes bibliographical references.
In this dissertation, I present three empirical essays that encompass topics in industrial organization. The first essay examines the degree of competition and spatial differentiation in the retail industry by exploiting a unique dataset that describes a consumer's choice of store, product of purchase, item price, and demographics. I estimate a consumer's choice of retailer in the sales market for DVDs among online, mass merchant, electronics, video specialty, and music stores, and I allow for unobserved heterogeneity in preferences for store types and disutility of travel. A consumer's traveling cost varies by income, and substitution occurs proportionately more among stores of the same type. The second essay investigates an intriguing puzzle in the movie industry: "why do studios cluster their big theatrical hits during the July 4th weekend?" A series of recent papers by Einav (2002) indicate that although the underlying demand for theatrical movies remains high around Labor Day, studios tend to release their high quality movies at the beginning of the summer. I employ data from the home video industry to provide more evidence on whether booms in theatrical revenues are supply- or demand-driven and to investigate why firms might cluster their releases as they do.
(cont.) The third essay presents examples based on actual and synthetic datasets to illustrate how simulation methods can often mask identification problems in the estimation of mixed logit models. Typically, simulation methods approximate an integral (that does not have a closed form) by taking draws from the underlying distribution of the random variable of integration. The examples reveal how a "low" number of draws can generate estimates that appear identified, but in fact, are either not theoretically identified by the model or not empirically identified by the data. The number of draws required to reveal the identification problem will depend on the data, model, and type of draws used. These examples emphasize the importance of checking the stability of the estimates with respect to the number of draws.
by Lesley C. Chiou.
Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2009.
Includes bibliographical references (p. 141-145).
Chapter 1 studies the optimal strategies of a monopolist selling a good to consumers who engage in word of mouth communication. The monopolist uses the price it charges to influence both the proportion of the population that is willing to purchase the good and the pattern of communication that takes place within the social network. I find a number of results: (i) demand is more elastic in the presence of word of mouth; (ii) the monopolist reduces the price to induce additional word of mouth for regular goods, however for goods whose valuation is greater for well connected individuals the price may, in fact, be greater; (iii) the optimal pattern of diffusion involves introductory prices which vary up and down; and (iv) exclusive (high priced) products will optimally target advertising towards individuals with many friends whereas common (low priced) products will target individuals with fewer friends. Chapter 2 presents a model of friendship formation in a social network. During each period a new player enters the social network, this player searches for and forms friendships with the existing population and all individuals play a prisoner's dilemma game with each of their friends. The set of friendships a player forms reveals some information to a friend about how likely she is to subsequently cooperate. Cooperative types are able to separate themselves from uncooperative types by becoming friends with people who know one another.
(cont.) The threat of communication amongst people who know one another prevents an uncooperative type mimicking a cooperative type. Chapter 3 analyzes the effects of policies which support electricity generation from intermittent technologies (wind, solar). I find that intermittent generation is a substitute for baseload technologies but may be complementary or substitutable for peaking/intermediate technologies. I characterize the long run implications of this for carbon emissions.
by Arthur Campbell.
Ph.D.

This dissertation addresses two issues in international economics and one issue in industrial organization. The first two chapters use sticky-price intertemporal optimizing models with incomplete financial markets to analyze the dynamics of the current account after technology shocks and the effects of the optimal monetary policy on current account movements. The third chapter models the upgrade behavior of existing software users and new software users under two market structures. The first chapter studies a small open economy with two sectors. In a perfect foresight, rational expectation general equilibrium model, with sticky prices in the non-traded goods sector, the evolution of the current account following a positive technology shock is efficient even without time consistent optimal monetary policy. The second chapter extends the general equilibrium model to a two-country economy and analyzes the effects of the optimal monetary policy on current account dynamics. The welfare gain for home households from the individual optimal expansionary monetary policy mainly comes from the home country's terms of trade improvement when most firms price the export prices in buyer currency. The third chapter finds that, for the new software version, the software vendor should offer a price discount to existing users and charge a higher price to new users if software users are sufficiently heterogeneous. For the old software version, a price discount should be applied to existing users with a higher price to new users if the price of the co-existing new version is high.
Arts, Faculty of
Vancouver School of Economics
Graduate

The aim of the thesis is to further explore the relationship between economic integration and firm mobility and investment, both from an empirical and a theoretical perspective, with the objective of drawing conclusions on how government policy can be used to strengthen the positive impact of integration on investment, which is crucial in moving and maintaining countries at the forefront of the technology frontier and accelerating economic growth in a world of rapid technical change and high mobility of ideas, goods, services, capital and labor.

The first chapter aims to bring together the literature on economic integration, firm mobility and investment. It contains two sections: one dedicated to the literature on FDI and the second covering the literature on firm entry and exit, economic performance and economic and business regulation.

In the second chapter I examine the relationship between the Single Market and FDI both in an intra-EU context and from outside the EU. The empirical results show that the impact of the Single Market on FDI differs substantially from one country to another. This finding may be due to the functioning of institutions.

The third chapter studies the relationship between the level of external trade protection put into place by a Regional Integration Agreement(RIA)and the option of a firm from outside the RIA block to serve the RIA market through FDI rather than exports. I find that the level of external trade protection put in place by the RIA depends on the RIA country's capacity to benefit from FDI spillovers, the magnitude of set-up costs of building a plant in the RIA and on the amount of external trade protection erected by the country from outside the reigonal block with respect to the RIA.

The fourth chapter studies how the firm entry and exit process is affected by product market reforms and regulations and impact macroeconomic performance. The results show that an increase in deregulation will lead to a rise in firm entry and exit. This in turn will especially affect macroeconomic performance as measured by output growth and labor productivity growth. The analysis done at the sector level shows that results can differ substantially across industries, which implies that deregulation policies should be conducted at the sector level, rather than at the global macroeconomic level.
Doctorat en sciences économiques, Orientation économie
info:eu-repo/semantics/nonPublished

This thesis is composed of three chapters each of which deals with markets with agents who are not fully rational. The first chapter aims to understand the relationship between Word-of-Mouth marketing and traditional advertisement. With the advent of internet and social network web-sites, the cost of Word-of-Mouth marketing reduced dramatically. This chapter mainly analyses the effect of this change on the traditional advertisement efforts. The second chapter analyses the market implications of manipulable consumers. Manipulable consumers are defined as the consumers whose beliefs about the future can be altered by advertisement decisions of firms. The equilibrium outcome is given and extensions are discussed. The last chapter of the thesis studies the consumers who decide which firm to approach by sampling the price information offered by firms. Consumers do not conduct a rational evaluation but use one of the procedures which are motivated by axioms reflecting their limited understanding of the strategic environment. I analyse the market implications of such procedures and conduct several comparative statics.

Thesis advisor: Julie H. Mortimer
The unifying theme of this dissertation is the growing importance of pharmaceutical products in health care and in society more broadly. The first two chapters use structural and reduced-form models to study the effects of various policies on the choice and utilization of prescription drugs. The third chapter surveys the empirical literature on the competitive effects of a class of pricing arrangements used in the pharmaceutical and many other industries. Chapter 1. One of the criticisms leveled against direct-to-consumer advertising of prescription drugs is that it overemphasizes the use of pharmaceuticals at the expense of other forms of treatment. In “Choice of Depression Treatment: Advertising Spillovers in a Model with Complementarity,” I study how antidepressant TV ads affect demand for psychotherapy. Antidepressant advertising can increase demand for therapy if the products are complements or if advertising has spillover effects. To disentangle the different channels, I develop a discrete-choice demand model that allows for complementarity between products, advertising spillovers, and flexible unobserved preference heterogeneity. Individual-level panel data on treatment choices and price variation allow me to separately identify complementarity and correlated preferences, whereas the average price of TV advertising, used as an instrument, identifies the causal effect of antidepressant ads on demand for each product. The results indicate that even though antidepressants and psychotherapy are substitutes, drug advertising increases demand for therapy through a spillover effect. Allowing for time-invariant and time-varying unobservables that can be correlated across products critically affects the estimated degree of complementarity and advertising elasticities. Chapter 2. While prescription drugs have enabled the cost-effective treatment of a myriad of diseases, many pharmaceuticals come with potential for abuse. The growing use of opioid medications for chronic pain led to widespread misuse, addiction, and skyrocketing overdose death rates. In “Did Plain-Vanilla Prescription Drug Monitoring Programs Reduce Opioid Use? Evidence from Privately Insured Patients,” I explore whether prescription drug monitoring programs (PDMPs) with no registration or use mandates were effective in reducing the utilization of opioid prescription drugs. Exploiting the staggered introduction of such programs between 2008 and 2010, I use difference-in-differences to estimate their causal effect on the number of prescriptions, days supply, and dosage per capita. Based on data from privately insured adults, the estimation results reveal that PDMPs successfully reduced opioid utilization, especially of high-dosage prescriptions. A battery of robustness checks suggests that the estimated effects are caused by the PDMPs and not by confounding factors such as broader trends in health care, attrition, out-of-state purchases, or other anti-opioid policies. Chapter 3. The assumption that buyers pay the same price for each unit of the good they purchase underlies many economic analyses. However, linear pricing is one of many pricing arrangements used in practice. In “Empirical Evidence on Conditional Pricing Practices: A Review,” Julie Holland Mortimer and I review the existing empirical studies on the competitive impact of conditional pricing practices (CPPs), under which the price of a product may depend on a quantity, share, bundling, or other requirement. Examples of CPPs include all-units and loyalty discounts, full-line forcing contracts, and exclusivity arrangements. A common thread unifying the empirical literature is that CPPs often have both procompetitive and anticompetitive effects and that their net effect may depend on the details of the arrangements and the characteristics of the markets in which they are used
Thesis (PhD) — Boston College, 2020
Submitted to: Boston College. Graduate School of Arts and Sciences
Discipline: Economics

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, September, 2020
Cataloged from student-submitted PDF of thesis. "Chapter 3, written with professors David Atkin and Keith Chen"--Page 4.
Includes bibliographical references (pages 169-173).
First two chapters of this thesis study the wholesale and retail tier of the beer supermarket sales. In the first chapter, I am interested in consolidation of distributors in the beer industry and its interaction with the uniform pricing by retailers. I build a theoretical model which illustrates how distributor consolidation in a set of counties may affect retail prices in all counties, depending on how strong the incentive of retail chains to price uniformly is. I test the predictions of the model using Nielsen scanner price data. I study two events of distributor consolidation in Ohio in 2009-2011, which followed upstream MillerCoors joint venture in 2008. In one of the events, distributor consolidation has no price effects. In another, bigger event, prices of consolidated brands (Miller, Coors, Heineken and Modelo) in treated counties increase by 0.46% relative to the control ABI brands. I find no evidence of prices in other counties being affected.
The findings are consistent with some cases of my theoretical model. The implications of this study are that modeling distribution tier and uniform pricing by retailers may be important for horizontal merger practitioners, both for retrospective analysis and for forecasting. Chapter 2 is devoted to the reasons for uniform pricing. I estimate the model, introduced in the first chapter, where supermarket chains have an incentive to set a uniform price for a given product across different locations. The model includes a product-specific baseline price which a supermarket chain sets, and a penalty for deviation from this baseline price. A single store will not deviate from the baseline price, if the marginal profits from doing so are smaller than the penalty parameter. My estimates suggest that the penalty for a dollar change from a benchmark price in a given week is around $12 to $16. Uniform pricing leads to suboptimal choice of prices relative to a problem with no penalty.
There is substantial price re-optimization, which, however, does not affect profits much, due to changes in prices having a small first-order effect around the optimum. Supermarket chains only lose 0.4% of profits from pricing uniformly. Effects on consumers are highly heterogeneous across locations and weeks, with change in consumer surplus varying from -0.55$ to 1.92$ per consumer per week. I show that change in consumer surplus due to uniform prices is positively correlated with income, with higher income zip codes benefiting more from uniform pricing. This effect, although economically meaningful in aggregate, is not large for an average consumer. Chapter 3, written with professors David Atkin and Keith Chen, adds to the literature studying knowledge spillovers in modern cities. The returns to face-to-face interactions are of central importance to understanding the determinants of agglomeration.
However, the existing literature studying patterns of geographic proximity in patent citations or industrial co-location has struggled to disentangle the benefits of face-to-face interactions from other spatial knowledge spillovers. In this paper we attempt to more directly measure face-to face interactions using highly granular worker geolocation data in Silicon Valley. To understand the degree to which knowledge flows result from their interactions, we study the relationship between cross-firm worker meetings and cross-citations between their firms. To navigate endogeneity concerns due to firms organizing meetings with firms they wish to learn from, we focus on serendipitous meetings--measured by the interactions of workers in neighboring firms in very different industries--that play a central role in the urban theories of Jane Jacobs.
The subset of these chance meetings occurring during work-hours also serve as costs shifters to meeting face-to-face rather than remotely, allowing us to separately identify the returns to planned meetings. Our results suggest substantial knowledge spillovers from face-to-face interactions, including increases in citations resulting from serendipitous meetings that are a third as large as the elasticity with respect to physical distance.
by Anton Popov.
Ph. D.
Ph.D. Massachusetts Institute of Technology, Department of Economics

Industrial organization focuses on imperfectly competitive markets to understand the behavior of firms and the resulting welfare effects. This is a broad definition as most markets are imperfectly competitive and industrial organization research can then focus on a wide variety of topics. Imperfect competition may be due to many reason. Perfect competition in fact requires: a large number of firms and consumers, free entry and exit, marketability of all goods and service including risk, symmetric information with zero search cost. Moreover the list includes no increasing returns, no externalities, and no collusion. Health care markets are a good example for imperfect competition as generally they violate all requirements included in the previous list. If we focus only on some violation like asymmetric information and no marketability, then health care markets fail in a more clear way than other markets. This justifies the often made claim that the health care market is “different” and implies that any evaluation of its performance must be based on models that explicitly take into account its deviations from the assumption required for perfect competition. The model of perfect competition can still serve as the benchmark of optimal performance, but generally it cannot be used to analyze how health care markets work. For this reason the common thread of this thesis is to analyze health care markets using the theoretical and empirical tools provided by industrial organization. This thesis is composed by three essays. In the first one I am going to propose a theoretical framework to analyze product differentiation with consumers misperception and information disparities. The model is an extension of standard vertical product differentiation (Gabsewictz and Thisse, 1979 and Shaked and Sutton, 1982), where I relax the assumption of perfect information. As I said before asymmetric information is one of the big problem to deal with in health economics. And if products are credence goods, as in case of drugs, many consumers may lack the expertise to ascertain the quality differential with respect to cheaper standard brands, even after purchase. In that case consumers face a risky decision and to the extent they lack information about the true quality differential they may carry out purchase decision according to misperceptions about product quality. In this paper I extend the analysis of Cavaliere (2005) to include the quality choice by firms, when providing higher quality requires a costly effort, and propose to analyse the case of a duopoly with vertically differentiated products with consumers’ misperceptions and information disparities. Consumers are actually split between uninformed and informed consumers. Uninformed consumers are characterized by consumers’ misperceptions as they can underestimate or overestimate the quality differential. As a minimum quality standard is imposed by the Government even uninformed consumers expect that any product sold in the market at least complies with the standard. As low quality can be said to be verifiable, even uninformed consumers can be confident about low quality products: firms are expected to provide at least the minimum quality standard. This last assumption well fits the case of pharmaceutical products. Actually every developed country has a national institution that enforces and verifies drug’s minimum quality standard. The aim of this paper is to shed light on how firm set price and quality when consumers are characterized by asymmetric information and mispercemption obout quality. We do not analyze information decisions by consumers, which are exogenously given, therefore firms follow a Stackelber behavior vis à vis consumers. However we can analyze quality and price competition between firms for the full range of information disparities, i.e. for any split between informed and uninformed consumers that can affect demand functions. Furthermore we distinguish between the case of optimistic misperceptions (uninformed consumers overestimate the quality differential) and the case of pessimistic consumers (uninformed consumers underestimate the quality differential). Competition between firms is represented by a two stage game, in the first stage the two firms compete in qualities, given the market split between informed and uninformed consumers. In the second stage price competition takes place. We will show that both price and quality are strictly depend on asymmetric information as expectation and number of informed consumer affect firm’s choice. For different quality expectations and share of informed consumer we found market failure. In some cases uninformed consumers are cheated by high quality firm when they purchase high quality product, in other cases, for different information level and expectations, adverse selection arises endogenously in the model. The second paper consists in a theoretical model where I analyse incentives for cooperative behaviour when heterogeneous health care providers are faced with regulated prices under yardstick competition. Providers are heterogeneous in the degree to which their interests match to those of the regulator. The basic idea behind yardstick competition is that the price (or price cap) faced by each provider is dependent on the actions of all the other providers (Schleifer, 1985; Laffont and Tirole, 1993). According to Schleifer’s rule, the price each provider faces is based on the costs of all other providers in the industry but not its own. This creates strong incentives for cost control. When there is a large number of providers, this is unlikely to be a problem, mainly because the cost of collusion rises, but even in larger countries, provision might be concentrated among a handful of providers, as is likely for utilities, rail or postal services and for specialist health services, such as bone marrow or lung transplantation. The innovation with respect to the standard model of yardstick competition is the introduction of heterogeneity in the degree to which the provider’s interests correspond to those of the regulator. Because the incentive to collude with other providers will depend on the objectives of the providers, particularly the extent to which their objectives correspond with those of the price-setting regulator. We use “altruism” to describe the behavior of providers whose aims are closely related to those of the regulator and “self-interested” to describe providers whose interests are more divergent from those of the regulator. If we consider the different ownership types in health services this heterogeneity in “altruism” is evident since we observe full public ownership i.e. altruistic providers and full private hospital i.e. self-interested providers. This paper aims then to analyse incentives for collusive behaviour when heterogeneous providers are faced with regulated prices under yardstick competition. We analyse the choice of cost when providers do not collude and when they do, and we consider incentives to defect from the collusion agreement Our results suggest that under the yardstick competition each provider’s choice of cooperative cost is decreasing in the degree of the other provider’s altruism, so a self-interested provider will operate at a lower cost than an altruistic provider. The prospect of defection serves to moderate the chosen level of operating cost. More general results show that collusion is more stable in homogeneous than in heterogeneous markets. The third paper is an empirical analysis where I test the hypotheses of physicians’ altruism and ex-post moral hazard using a large national panel dataset of drug prescription records from Finland. We estimate the probability that doctors prescribe generic versus branded versions of statins for their patients as a function of the shares of the difference in prices between what patients have to pay out of their pocket and what are covered by insurance. The role of physicians and insurance in health care markets has been of interest to economists since the seminal contribution of Arrow (1963). Pioneering the economic analysis of physician behavior in the context of health care, Arrow (1963) noticed that doctors may have motives and objectives that differentiate them from purely profit-maximizing agents. The original ‘ex-post moral hazard’ hypothesis, predicts that health insurance increases the consumption of health care and leads to excessive consumption of services even in a competitive health care market. Ex-post moral hazard has since then been the focus of various empirical and theoretical studies in health economics (see e.g. Feldstein, 1973; Leibowitz, Manning, and Newhouse, 1985; Manning, Newhouse, Duan, Keeler, Leibowitz, and Marquis, 1987; Dranove, 1989; Zweifel and Manning, 2000). We simultaneously test both altruism and ex-post moral hazard in drug prescription behavior using a large national panel of administrative data from Finland. We first develop a theoretical model on physician decision-making, which, in line with Hellerstein (1998) and Lundin (2000), then use a large national panel dataset with all statin prescriptions in Finland between 2003 and 2010 (n=17 858 829 prescriptions) to test the physicians’ altruism and ex-post moral hazard hypotheses, while controlling for a large range of physicians, patients, and drug characteristics. Taking advantage of the panel structure of our national administrative dataset, we directly observe the repeated prescriptions of statins by physicians over time. We find that although the estimated coefficients associated with ex-post moral hazard and altruism are statistically significantly different from zero, their size is very close to zero and the orders of magnitude is smaller than the effects associated with other key explanatory factors. We also find robust and strong evidence of prescription habit-dependency.

In recent years there has been a considerable interest, both theoretical and empirical, on the analysis of the nature, sources, and speed of diffusion of technological change, stemming from the importance of technological activities in determining the economic performance of the most industrialised market economies. During the last decade, at the international level, two models in particular have attracted attention for their dramatic path of growth: the Japanese system and the "Third Italy" model, the latter based on small firm development and on an extensive inter-firm division of labour. This thesis explores "empirically" the nature of technological capacities in a selected sample of more than 100 firms located in one of the regions more representative of the "Third Italy" model - the Veneto region - and shows the (partially achieved) process of technological catching-up. It develops a rich range of indicators for testing the innovative capability of firms, which derive from an ample reflection on the nature of the industrial innovation and the determinants of industrial organisation, conducted in the first two (theoretical) chapters. Links to strategy, organisation, and firm competitiveness are also highlighted. The author examines in chapters 3~ 4, 5, and 6 the performance of the industrial structure analysed, where R&D activities scores very low, showing the various models of firms' technological learning, the importance of innovation acquisition, and the weight of internal improvements in driving the, evolutionary strategy of each individual firm. In the light of the "Third Italy" debate, which emerged after the Piore and Sabel publication in 1984, the thesis challenges the over-simplistic explanation of the ,existence of small-based industrial structures. This research illustrates the main factors structuring growth and size, and the recent tendency found towards the re-centralisation of the industrial structure. This work follows the seminal contribution of Pavitt (1984), where some regularities were found, within specific groups of firms ("science based", "scale intensive", "specialised suppliers", "scale intensiveltraditional", and "traditional"). In our sample, the prevailing small-size of firms appeared strongly correlated to the diffused presence of fIrms belonging to "traditional sectors" and to "specialised suppliers". In this perspective, the firms' evolution does not seem to be related at all to the adoption of non-Fordist techniques, but it derives from: a) the origin and rate of growth of the industrial structure, b) the influence of the firm's "governance", c) the sectoral inter-firm division of labour, d) the extent of the market, and, e) dynamically, the exploitation of technological change. In chapter 7, an econometric test has been applied to verify the positive relationship between innovation and firm growth.

This dissertation consists of three essays evaluating topics in industrial organization. The first essay investigates a market structure or property regime in which a final good exists only by assembling multiple, monopoly-supplied components. In such dynamic settings, any sunk cost results in an outcome of hold-up, also known as tragedy of the anticommons. I design a model showing conditions for which two factors that reduce sunk cost, refunds and complementarities, mitigate hold-up. If the first component purchased has positive stand alone value or the first seller offers a full refund, hold-up is mitigated. My results suggest several policies that can mitigate inefficient outcomes in assembly problems, including legal requirements on full refunds, regulation on the purchasing order of components, and prohibition of price discrimination. The second essay applies Bayesian statistics to single-firm event studies used in securities litigation and antitrust investigations. Inference based on Bayesian analysis does not require an assumption of normality that potentially invalidates standard inference of classical single-firm event studies. I investigate ten events, five from actual securities litigation cases. Various Bayesian models, including replication of the frequentist approach, are examined. A flexible Bayesian model, replacing parametric likelihood functions with the empirical distribution function, also is explored. Our approach suggests an alternative, valid method for inference with easy implementation and interpretation. The third essay, motivated in the context of pharmaceutical advertising, analyzes demand rotations caused by an exogenously determined advertising parameter under Cournot oligopoly competition. We find that firms and consumers prefer extreme levels of advertising, but preferences for which extreme do not necessarily align. However, these differences can be alleviated with few or many firms in the market or cheap or expensive technologies. Therefore, advertising levels, regulated or not, might not serve consumers' best interests unless certain market attributes hold.

This dissertation contains essays that explore the incentives, mechanisms and strategies of platforms in concentrated internet markets. The first essay studies how two-sided platforms compete and set dynamic prices. In the daily deals industry, an expected increase in competition for seller participation prompted a cross-side response by the dominant platform, Groupon, to lower prices on deal coupons sold to attract platform users. I use a dynamic model of competing daily deals platforms to investigate why we observe a larger downward price response in markets where platforms have similar shares of users. Simulations show a sharp increase in value of an additional user as cross-side competition intensifies for profits from being the future platform leader. The second essay---coauthored with Benjamin G. Edelman---examines how competition is mediated by search intermediaries, looking at the design of search engines' own services and the effects on users' choices. We evaluate a natural experiment, and find that Google's prominent placement of its Flight Search service increased clicks on paid advertising listings while decreasing the clicks on organic search listings by a similar quantity. Empirical results and a controlled experiment links the mechanism to users' heterogeneous methods of search. The third essay---coauthored with Michael Egesdal and Che-Lin Su---develops empirical tools for estimating dynamic discrete-choice games. We formulate the maximum-likelihood estimator as a constrained optimization problem to be solved using state-of-the-art constrained optimization solvers. Monte Carlo results show that the constrained optimization approach has improved convergence properties over other popular computational methods.
Economics