Essays On Behavioral Industrial Organization And Finance
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Essays On Behavioral Industrial Organization And Finance
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Author : Pantelis Karapanagiotis
language : en
Publisher:
Release Date : 2021
Essays On Behavioral Industrial Organization And Finance written by Pantelis Karapanagiotis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
Essays On Behavioral Industrial Organization
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Author : Karen Khachatryan
language : en
Publisher:
Release Date : 2008
Essays On Behavioral Industrial Organization written by Karen Khachatryan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
Essays In Behavioral Industrial Organization
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Author : Kenan Kalayci
language : en
Publisher:
Release Date : 2011
Essays In Behavioral Industrial Organization written by Kenan Kalayci and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
Essays In Industrial Organization And Finance
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Author : Thomas Rutford Covert
language : en
Publisher:
Release Date : 2014
Essays In Industrial Organization And Finance written by Thomas Rutford Covert and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This dissertation consists of two essays on the behavior of traders in opaque financial markets and one on the behavior of firms while they are learning to use a new technology.
Essays In Behavioral Industrial Organization And Mechanism Design
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Author : Johannes Johnen
language : en
Publisher:
Release Date : 2016
Essays In Behavioral Industrial Organization And Mechanism Design written by Johannes Johnen 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.
Essays In Behavioral Industrial Organization
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Author : Takeshi Murooka
language : en
Publisher:
Release Date : 2014
Essays In Behavioral Industrial Organization written by Takeshi Murooka and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
This dissertation consists of three chapters on behavioral industrial organization. The first chapter, titled "Deception under Competitive Intermediation," investigates the incentives of intermediaries - such as mortgage brokers, financial advisors, or insurance salespeople - to educate consumers who misperceive the value of products. Two types of firms sell products through competing common-agent intermediaries and pay commissions for sales. One sells a transparent product, while the other sells a deceptive product that has a hidden fee, quality, or risk. Each intermediary chooses which product to offer and whether or not to educate consumers about the hidden attribute. Each consumer visits a fixed number of intermediaries and buys at most one item. When consumers correctly anticipate the hidden attribute, intermediaries reveal it and commissions are competed away. When consumers misperceive the hidden attribute, however, intermediaries employ deception if and only if the degree of misperception is large. If deception occurs, intermediaries earn high commissions despite competition. Furthermore, because consumers ultimately bear the cost of such commissions, consumer welfare is lower when intermediaries can educate consumers than when they cannot. Deception is less likely to occur when consumers visit more intermediaries before making their purchase decisions. Conditional on deception, however, visiting more intermediaries further raises the level of commissions because deceptive firms need to give each intermediary a higher commission to maintain the deception. Regulating commissions - analogous to recent policies in the US mortgage industry as well as in the Australian and UK mutual-fund industries - can lead intermediaries to reveal all hidden attributes. The second chapter, titled "Inferior Products and Profitable Deception" and co-authored with Paul Heidhues and Botond Kőszegi, analyzes conditions facilitating profitable deception in a simple model of a competitive retail market. Firms selling homogenous products set up-front prices that consumers understand and additional prices that naive consumers ignore unless revealed to them by a firm, where - to model especially financial products such as credit cards and mutual funds - we assume that there is a binding floor on the up-front prices. Our main results establish that "bad" products (those with lower social surplus than an alternative) tend to be more reliably profitable than "good" products. Specifically, (1) in a market with a single socially valuable product and sufficiently many firms, a deceptive equilibrium - in which firms hide additional prices - does not exist and firms make zero profits. But perversely, (2) if the product is socially wasteful, then a firm cannot profitably sell a transparent product, so there is no incentive to reveal the additional prices and hence a profitable deceptive equilibrium always exists. Furthermore, (3) in a market with multiple products, since a superior product both diverts sophisticated consumers and renders an inferior product socially wasteful in comparison, it guarantees that firms can profitably sell the inferior product by deceiving consumers. The third chapter, titled "Exploitative Innovation" and co-authored with Paul Heidhues and Botond Kőszegi, studies innovation incentives in a simple model of a competitive retail market with naive consumers. Firms selling perfect substitutes play a game consisting of an innovation stage and a pricing stage. At the pricing stage, firms simultaneously set a transparent "up-front price" and an "additional price," and decide whether to shroud the additional price from naive consumers. To capture especially financial products such as banking services, credit cards, and mutual funds, we allow for a floor on the product's up-front price. At the preceding innovation stage, a firm can invest either in increasing the product's value (value-increasing innovation) or in increasing the maximum additional price (exploitative innovation). We show that if the price floor is not binding, the incentive for either kind of innovation equal the "appropriable part" of the innovation, implying similar incentives for exploitative and value-increasing innovations. If the price floor is binding, however, innovation incentives are often stronger for exploitative than for value-increasing innovations. Because learning ways to charge higher additional prices increases the profits from shrouding and thereby lowers the motive to unshroud, a firm may have strong incentives to make appropriable exploitative innovations, and even stronger incentives to make non-appropriable exploitative innovations. In contrast, the incentive to make non-appropriable value-increasing innovations is zero or negative, and even the incentive to make appropriable value-increasing innovations is strong only if the product is socially wasteful. These results help explain why firms in the financial industry have been willing to make innovations others could easily copy, and why these innovations often seem to have included exploitative features.
Handbook Of Behavioral Industrial Organization
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Author : Victor J. Tremblay
language : en
Publisher: Edward Elgar Publishing
Release Date : 2018
Handbook Of Behavioral Industrial Organization written by Victor J. Tremblay and has been published by Edward Elgar Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
The Handbook of Behavioral Industrial Organization integrates behavioral economics into industrial organization. Chapters cover concepts such as relative thinking, salience, shrouded attributes, cognitive dissonance, motivated reasoning, confirmation bias, overconfidence, status quo bias, social cooperation and identity. Additional chapters consider industry issues, such as sports and gambling industries, neuroeconomic studies of brands and advertising, and behavioral antitrust law. The Handbook features a wide array of methods (literature surveys, experimental and econometric research, and theoretical modelling), facilitating accessibility to a wide audience.
Essays In Public Finance And Industrial Organization
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Author : David S. Rapson
language : en
Publisher:
Release Date : 2009
Essays In Public Finance And Industrial Organization written by David S. Rapson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
Abstract: Prices guide the allocation of scarce resources. Whether this allocation is "good" often depends on whether the incentives generated by the market structure induce positive actions (like work effort or savings) or allow for unintended consequences that harm the greater good (like collusion or pollution). This dissertation examines three of these incentive structures in the context of public finance and industrial organization. Chapter 1 seeks to illuminate drivers of long-run energy demand from consumer durable goods, and is motivated by the large, negative pollution externality associated with energy use. I specify a structural model of air conditioner purchase timing and usage, which explicitly incorporates dynamic consumer behavior. Parameter estimates allow me to evaluate several popular demand-side energy policies. Results indicate that a carbon tax is a potent lever to achieve energy demand reductions, both immediately and in the long run. Efficiency standards are also appropriate for long-term energy reduction, though their effectiveness is reduced by causing people to purchase more energy-intensive units. Chapter 2 revisits the question of tacit collusion in the 1950s automobile industry. In his famous paper, Bresnahan (1987) develops a model to explain the brief spike in quantity in 1955, and concludes that the episode was caused by a temporary breakdown in tacit collusion. His model imposes strong restrictions on the nature of consumer preferences and intra-firm, multi-product pricing strategies. I reconstruct his original dataset and solve a random coefficients logit model that allows for a full range of substitution patterns and pricing strategies. For no year in 1954-1956 can the firm behavioral hypothesis of Bertrand competition be rejected in favor of tacit collusion. Results also indicate that firms were not profit maximizing during this period. Firm-level strategic pricing is rejected in favor of inter-brand competition. In Chapter 3 I estimate marginal effective tax rates facing households in Massachusetts, and reveal the bewildering nature of incentives that households face to work and save. We find that the U.S. fiscal system provides most households with very strong reasons to limit their labor supply and saving. It also offers some households tremendous opportunities to arbitrage the tax system by contributing to retirement accounts.
Essays In Industrial Organization
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Author :
language : en
Publisher:
Release Date : 2009
Essays In Industrial Organization written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
This dissertation consists of three self–contained papers, which contribute to different strands of the literature on industrial organization and microeconomic theory. In Chapter 2, I analyze an incentive problem within a principal–agent employment relationship when the principal has better information about the job offered to the agent. Chapter 3 examines market outcomes when consumers are loss averse. It contributes to the literature on behavioral industrial organization. Chapter 4 studies the allocation of ownership and control rights within industries and its implication on competition. It links the literature on industrial organization with the corporate finance literature. The appendix contains the appendices of the papers in which proofs and tables are presented. References of the papers can be found in the last chapter of the thesis.
Essays In Public Finance And Industrial Organization
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Author : Neale Ashok Mahoney
language : en
Publisher: Stanford University
Release Date : 2011
Essays In Public Finance And Industrial Organization written by Neale Ashok Mahoney and has been published by Stanford University this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This dissertation has four chapters. The first three chapters examine health insurance markets in the U.S., focusing in particular on contexts where there are important interactions between health insurance plans. The fourth chapter is on the U.S. budget, examining the implications of annual budget cycles on the quantity and quality of end-of-year spending. Chapter 1, entitled "Bankruptcy as Implicit Health Insurance" examines the interaction between health insurance and the implicit insurance that people have because they can file (or threaten to file) for bankruptcy. With a simple model that captures key institutional features, I demonstrate that the financial risk from medical shocks is capped by the assets that could be seized in bankruptcy. For households with modest seizable assets, this implicit "bankruptcy insurance" can crowd out conventional health insurance. I test these predictions using variation in the state laws that specify the type and level of assets that can be seized in bankruptcy. Because of the differing laws, people who have the same assets and receive the same medical care face different losses in bankruptcy. Exploiting the variation in seizable assets that is orthogonal to wealth and other household characteristics, I show that households with fewer seizable assets are more likely to be uninsured. This finding is consistent with another: uninsured households with fewer seizable assets end up making lower out-of-pocket medical payments. The estimates suggest that if the laws of the least debtor-friendly state of Delaware were applied nationally, 16.3 percent of the uninsured would buy health insurance. Achieving the same increase in coverage would require a premium subsidy of approximately 44.0 percent. To shed light on puzzles in the literature and examine policy counterfactuals, I calibrate a utility-based, micro-simulation model of insurance choice. Among other things, simulations show that "bankruptcy insurance" explains the low take-up of high-deductible health insurance. Chapter 2, entitled "Pricing and Welfare in Health Plan Choice", is coauthored with M. Kate Bundorf and Jonathan Levin. The starting point for the paper is the simple observation that when insurance premiums do not reflect individual differences in expected costs, consumers may choose plans inefficiently. We study this problem in health insurance markets, a setting in which prices often do not incorporate observable differences in expected costs. We develop a simple model and estimate it using data on small employers. In this setting, the welfare loss compared to the feasible risk-rated benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restrictions on risk-rating employee contributions; the rest is due to inefficient contribution choices. Despite the inefficiency, the benefits from plan choice relative to each of the single-plan options are substantial. Chapter 3, entitled "The Private Coverage and Public Costs: Identifying the Effect of Private Supplemental Insurance on Medicare Spending, " is coauthored with Marika Cabral. While most elderly Americans have health insurance coverage through Medicare, traditional Medicare policies leave individuals exposed to significant financial risk. Private supplemental insurance to "fill the gaps" of Medicare, known as Medigap, is very popular. In this Chapter, we estimate the impact of this supplemental insurance on total medical spending using an instrumental variables strategy that leverages discontinuities in Medigap premiums at state boundaries. Our estimates suggest that Medigap increases medical spending by 57 percent--or about 40 percent more than previous estimates. Back-of-the-envelope calculations indicate that a 20 percent tax on premiums would generate combined revenue and savings of 6.2 percent of baseline costs; a Pigovian tax that fully accounts for the fiscal externality would yield savings of 18.1 percent. Chapter 4, entitled "Do Expiring Budgets Lead to Wasteful Year-End Spending? Evidence from Federal Procurement, " is coauthored with Jeffrey Liebman. Many organizations fund their spending out of a fixed budget that expires at year's end. Faced with uncertainty over future spending demands, these organizations have an incentive to build a buffer stock of funds over the front end of the budget cycle. When demand does not materialize, they then rush to spend these funds on lower quality projects at the end of the year. We test these predictions using data on procurement spending by the U.S. federal government. Using data on all federal contracts from 2004 through 2009, we document that spending spikes in all major federal agencies during the 52nd week of the year as the agencies rush to exhaust expiring budget authority. Spending in the last week of the year is 4.9 times higher than the rest-of-the-year weekly average. We examine the relative quality of year-end spending using a newly available dataset that tracks the quality of $130 billion in information technology (I.T.) projects made by federal agencies. Consistent with the model, average project quality falls at the end of the year. Quality scores in the last week of the year are 2.2 to 5.6 times more likely to be below the central value. To explore the impact of allowing agencies to roll unused spending over into subsequent fiscal years, we study the I.T. contracts of an agency with special authority to roll over unused funding. We show that there is only a small end-of-year I.T. spending spike in this agency and that the one major I.T. contract this agency issued in the 52nd week of the year has a quality rating that is well above average.