Essays In Networks And Applied Microeconomic Theory
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Essays In Networks And Applied Microeconomic Theory
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Author :
language : en
Publisher:
Release Date : 2014
Essays In Networks And Applied Microeconomic Theory written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with Business networks categories.
This thesis contains three papers which examine the role of networks and social structure in different modes of socio-economic interactions. The first chapter focuses on purely competitive strategic bilateral interactions - contests. I analyse situations in which agents, embedded in a network, simultaneously play interrelated bilateral contest games with their neighbours. The network structure uniquely determines the behaviour of agents in the equilibrium. I also study the formation of such networks, finding that the complete k-partite network is the unique stable network topology. This implies that agents will endogenously sort themselves in partitions of friends, competing with members of other partitions. The model provides a micro-foundation for the structural balance concept in social psychology, and the main results go in line with theoretical and empirical findings from other disciplines, including international relations, sociology and biology. The second chapter is joint work with my supervisor Fernando Vega-Redondo. We study a competitive equilibrium model on a production network of firms, identifying the measure of centrality in the network that determines the profit of a firm, and network structures that maximize social welfare. The significant part of this chapter focuses on how the network mediates the effects of revenue distortions on profits of firms and social welfare. The results are that the effects of distortions propagate both upstream and downstream through the network. The centrality of the affected firm determines the magnitude of the downstream effect, and the upstream effect is determined by the intercentralities of suppliers of the affected firm. Increasing the density of the network by adding links has a non-monotonic effect on welfare. Adopting a more complex production technology can increase but also decrease the profit of a firm, depending on the network structure; while finding a new buyer will always increase the profit of a firm. In the third paper I analyse the interaction between formal legal enforcement of cooperation and the role of reputation in a heterogeneous population. By choosing to cooperate, even when the quality of the formal institution is not high, an agent signals that he has high work ethics, thereby earning reputation as a better match for future interactions. When there is reputation benefit, the welfare-maximizing quality of the enforcement institution is generally not the one that maximizes cooperation. Depending on the distribution of types in society, the effect of the increase in quality of enforcement on cooperation can be crowded in or crowded out by reputation concerns. When the institutional quality is determined endogenously, the equilibrium quality of the institution will generically be higher than the optimal quality.
Essays In Microeconomic Theory And The Economics Of Networks
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Author : Yiqing Xing
language : en
Publisher:
Release Date : 2016
Essays In Microeconomic Theory And The Economics Of Networks written by Yiqing Xing and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This thesis consists of three essays in microeconomic theory and the economics of networks. Chapter 1 establishes a model in which agents first form risk-sharing pairs, and then repeatedly share income risks under limited commitment. Agents of different occupations differ in income autocorrelations, i.e. how their current incomes correlate with past ones. I show that agents with high autocorrelation are hard to share risks with. With endogenous matching, two equilibrium outcomes can occur: either 1) agents match positive assortatively, or 2) agents from different occupations do match together, but in order to sustain such matches, agents share risks unevenly favoring the relatively less autocorrelated. Either equilibrium features substantial inequality across occupations and low total welfare, compared to what would happen if a social planner could impose an optimal matching to agents. The interplay between matching and risk sharing can change our views on policies. For instance, uniform increases in everyone's low income levels (minimal wages) may hurt some agents. Increases in occupation-specific common income shocks could improve overall risk sharing and reduce inequality. My results are also robust to forms of heterogeneity other than income autocorrelations, such as heterogeneous opportunities to rematch or migrate. This model is among the first attempts to consider both partnership formation and subsequent interactions. I highlight the point that how a pair of agents interact (share risks in this case) does not only depend on the two of them, but also on their potential links to others, and how others interact. Such a framework has important policy implications because a policy can change how agents interact as well as whom they interact with. Without considering these effects, out policy evaluations could be inadequate. Chapter 2 (coauthored with Matt Jackson) is an online experiment to justify homophily, the tendency of people to interact with others that are similar to themselves, by the ease of coordination among agents with a similar cultural background. In particular, we examine whether people are better at predicting how others with similar cultural backgrounds will behave, compared to others with different cultural backgrounds. We also explore whether this translates into better coordination. The more than a thousand participants in our experiment mainly reside in two countries: India and the United States. Participants are paired to act in a simple coordination environment with multiple coordination outcomes. Participants from India are much more likely than participants from the U.S. to choose actions that lead to very unequal payoffs across the two subjects. We also find that, although participants residing in different countries tend to choose different actions, they do not seem to adjust their actions according to their opponents' place of residence. One explanation for this pattern is that participants have no idea about what their opponents would do when the opponents are from a different cultural background from them, and wrongly believe that their opponents will behave similarly to themselves. This explanation is consistent with the data when we explicitly elicit participants' beliefs about the opponents' behaviors. In sum, due to the accuracy of predicting each others' behaviors, interactions between people who share a similar cultural background leads to a larger likelihood of coordination, and a higher payoff on average. Chapter 3 (coauthored with Matt Jackson and Hugo Sonnenschein) models negotiations that determine not only an agreement's price, but also its content, which typically has many aspects. We model such negotiations and provide conditions under which negotiation leads to efficient outcomes, even in the face of substantial asymmetric information regarding the value of each aspect. With sufficient information about the overall potential surplus, if the set of offers that agents can make when negotiating is sufficiently rich, then negotiation leads the agents to efficient agreements in all equilibria. Furthermore, the same negotiation game works regardless of the statistical structure of information - in this sense, no omniscient "planner" or "mechanism designer" is required. The theory and examples explore the anatomy of negotiation and may shed light on why many situations with significant asymmetric information exhibit little inefficiency. This chapter is within my research agenda of better understanding the social costs of asymmetric information without an omniscient and empowered "mechanism designer". Such a designer plays a key role in the mechanism design literature, but frequently is absent in applications. This chapter asks the question that whether two agents come about on their own, negotiating in "free-forms", can achieve (near) efficiency. Another paper of mine, "Intermediated Implementation", (with Anqi Li) is along the same line of research. There we ask the question whether a social planner can implement target allocations through market intermediaries (e.g., firms in the labor market) with simple policies such as per unit fee, labor income tax, or quota system.
Essays On Applied Microeconomics
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Author : Kristijan Gjorgjevik
language : en
Publisher:
Release Date : 2017
Essays On Applied Microeconomics written by Kristijan Gjorgjevik and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
This dissertation consists of three chapters that develop and implement economic models to analyze modern problems in Industrial Organization and Labor Supply. In the first chapter, I extend the standard BLP model (Berry et al. [1995]) to account for capacity constraints in a network and evaluate the welfare effects of the 2013 merger between American Airlines and US Airways. I show that including capacity as a constraint in the profit maximization problem that airlines face generates better out-of-sample predictions and leads to different policy implications. In particular, I find that the merger increased consumer surplus by 1.5-1.7%, while the benchmark model could predict it to have decreased by as much as 4.5%. In other words, ignoring capacity constraints could lead regulators to erroneously believe that this merger harmed consumers. I find that, on average, the merger increased the variable profit margins of airlines by 0.3-0.4%, and American Airlines' by 2.5%. I develop and implement an approach for ex-post merger evaluation that could be useful in antitrust legislation.In the second chapter, I extend the theory of efficiency wages (Shapiro and Stiglitz [1984]) to incorporate employer-sponsored health insurance. I develop sufficient conditions under which the Affordable Care Act increases efficiency wages. In particular, if the Affordable Care Act succeeds, at least in part, in inducing employers to provide health insurance and individuals to self-insure, then wages will rise after its implementation. I suggest that the Affordable Care Act may provide efficiency wage subsidies towards the welfare-maximizing wage level, and numerically show the existence of regions where this is the case.In the third chapter, I extend Mirrlees' theory of optimal taxation (Mirrlees [1971]) to include endogenous job search. I use a public-use microdata file on the Canadian labor force to calculate the optimal, revenue-neutral federal tax rates. The results are highly sensitive to the level of inequality aversion chosen for the social welfare function. The optimal tax rate schedule is hump-shaped in income.
Essays In Applied Microeconomics And Networks
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Author : Nils Christian Wernerfelt
language : en
Publisher:
Release Date : 2016
Essays In Applied Microeconomics And Networks written by Nils Christian Wernerfelt and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
Chapter 1 focuses on the recent dramatic shift in attitudes toward LGBT individuals in the U.S. and the accompanying rise in the number of Americans who have openly come out. We develop a model of stigma with Schelling-style tipping dynamics. Regions may be stuck in equilibria with low LGBT support and few openly gay individuals. These equilibria can be escaped via trigger events, that by causing even a small number of individuals to display their support for LGBT causes, can cause more individuals to come out, leading to more support, etc. We then evaluate our model with a large, online archival dataset on the timing of coming out decisions and public displays of support for LGBT causes for several million Americans. Using state-specific shocks to each, aggregate network data, and instrumental variables, we show how increases in LGBT support lead to elevated coming out rates in highly connected areas, and vice-versa. Chapter 2 studies a recent hypothesis that posits maternal vitamin D levels during pregnancy may affect the probability the fetus later develops asthma. Employing two large-scale studies, we test this hypothesis using a natural experiment afforded by historical variation in sunlight, a major source of vitamin D. Specifically, holding the birth location and month fixed, we see how exogenous within-location variation in sunlight across birth years affects the probability of asthma onset. We find highly significant evidence in both datasets that increased sunlight during the second trimester substantially lowers the subsequent probability of asthma. Finally, Chapter 3 is an evolutionary game theory paper about population structure. We provide a general, modularity-based framework for studying evolutionary games on structured populations under 'weak selection' that includes many previously known results as special cases. Our framework helps to show how these past disparate results are connected, and we exploit this insight to develop a general method for quantifying in closed form the effect of population structure on evolutionary dynamics. We illustrate our framework by proposing and solving a new model that generates a simple rule for the evolution of cooperation on endogenous dynamic networks.
Three Essays In Applied Microeconomics
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Author : Jan Sonntag
language : en
Publisher:
Release Date : 2019
Three Essays In Applied Microeconomics written by Jan Sonntag and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.
This dissertation revolves around two wider topics: social norms and production networks. The first chapter investigates a specific modern-day case study where social norms are leveraged in the fight against online hate speech to shed light on how norms shape political behavior more broadly. Using machine learning techniques, I show that speaking out against hateful views is an effective way of deterring further hate speech. The mechanism that most likely explains this effect is that vociferous contradiction in fact serves as a form of non-monetary punishment that raises the salience of a social norm. The second chapter focuses on the crucial role of image concerns in explaining the effect of social norms on behavior. While there are now plenty of studies showing that image concerns affect people on average, we still know very little about which individuals specifically drive that effect. I introduce a novel laboratory experiment designed to fill this gap. It generates an individual-specific measure of image concern, shows that there is substantial heterogeneity even in a small laboratory sample, and investigates how it correlates with other social preferences. The final chapter of my thesis focuses on production networks and in particular on vertical integration. Vertical integration give rise to anticompetitive behavior or indeed be a motive for it. I discuss one such mechanism, called vertical foreclosure, by which vertically integrating firms disrupt the supply of critical inputs to competitors. I leverage novel production network data to identify mergers and acquisitions between vertically related firms and show taht these mergers affect the supply chains of their rivals, which I interpret as evidence for foreclosure.
Essays On Applied Network Theory
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Author : Mariya Teteryatnikova
language : en
Publisher:
Release Date : 2010
Essays On Applied Network Theory written by Mariya Teteryatnikova and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Economics, Mathematical categories.
Applied Economics In The Digital Era
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Author : James Alleman
language : en
Publisher: Springer Nature
Release Date : 2020-05-16
Applied Economics In The Digital Era written by James Alleman and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-05-16 with Science categories.
Gary Madden was a renaissance man with respect to the nexus between information and communications technology (ICT) and economics. He contributed to a variety of fields in ICT: applied econometrics, forecasting, internet governance and policy. This series of essays, two of which were co-authored by Professor Madden prior to his untimely death, cover the range of his research interests. While the essays focus on a number of ICT issues, they are on the frontier of research in the sector. Gerard Faulhaber provides a broad overview of how we have reached the digital age and its implications. The applied econometric section brings the latest research in the area, for example Lester Taylor illustrates how own-price, cross-price and income elasticities can be calculated from survey data and translated into real income effects. The forecasting section ranges from forecasting online political participation to broadband’s impact on economic growth. The final section covers aspects of governance and regulation of the ICT sector.
Applied Approaches To Societal Institutions And Economics
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Author : Tohru Naito
language : en
Publisher: Springer
Release Date : 2017-09-21
Applied Approaches To Societal Institutions And Economics written by Tohru Naito and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-09-21 with Business & Economics categories.
This book gives readers the theoretical and empirical methods to analyze applied economics. They are institutional economics, information economics, environmental economics, international economics, financial economics, industrial organization, public economics, law and economics, and spatial economics. Because the chapters of this book deal with current topics in these categories, they are relevant not only to researchers and graduate students but also to policy makers and entrepreneurs. As there is uncertainty about the global economy, it is necessary to consider optimal, efficient behavior to survive in the confused world. The book is organized in three parts. Part 1 deals with institutional economics, information economics, and related topics, approached through game theory. Part 2 focuses on environmental economics, international economics, and financial economics, through a microeconomic or econometric approach. Finally, Part 3 concentrates on public economics, social security, and related fields, through microeconomics or macroeconomics.
Three Essays In Applied Microeconomics
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Author : Carmen Eugenia Carrion Flores
language : en
Publisher:
Release Date : 2007
Three Essays In Applied Microeconomics written by Carmen Eugenia Carrion Flores and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
In the final chapter of this dissertation, the general findings are concluded and some future avenues of research are discussed.
Essays On Microeconomic Theory
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Author : Alexander Thomas Clark
language : en
Publisher:
Release Date : 2018
Essays On Microeconomic Theory written by Alexander Thomas Clark and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
This dissertation includes two chapters, and each studies how people can influence others' actions, via cheap talk recommendations of through the exertion of social pressure. In the first chapter, I examine a game like the following: an informed high school wishes to convince the uninformed college to accept as many of the high school's students as they can, with no evidence available for relevant attributes like personal qualities. More generally, an uninformed receiver must accept or reject many propositions, and an informed sender wishes to convince the receiver to accept as many as possible, using only cheap talk messages. I provide a necessary and sufficient condition for when communication can be influential, and characterize a simple class of equilibria where the sender recommends a fixed number of propositions, all of which are accepted by the receiver, in every state. This kind of equilibrium can be receiver-optimal, providing a justification for the use of capacities in settings without actual constraints on the number of acceptances. In the second chapter, we develop a model in which costly voting in a large election is a sequentially rational choice of strategic, self-interested players who can reward fellow voters by forming stronger ties in a network formation coordination game. The predictions match a variety of stylized facts, including explaining why an individual's voting behavior may depend on what she knows about her friends' actions. Players have imperfect information about others' voting behavior, and we find that some degree of privacy may actually be necessary for voting in equilibrium, enabling hypocritical but useful social pressure. Our framework applies to any costly prosocial behavior.