Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1994. / Includes bibliographical references (leaves 113-115). / by William Robert Majure. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2018. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 155-164). / This thesis consists of three chapters on the role of media and communication in forming political opinions of news consumers and politicians. In the first chapter, I study the causal link between the public's self-selective exposure to like-minded partisan media and polarization. I first present a parsimonious model to formalize a traditionally neglected channel through which media selection leads to reduced polarization. In a world where the media heavily distorts signals with its own partisan preferences, familiarity with media biases is vitally important. By choosing like-minded partisan media, news consumers are exposed to familiar news sources. This may enable them to arrive at better estimates of the underlying truth, which can contribute to an alleviation of polarization. The predictions of this model are supported by experimental evidence collected from a South Korean mobile news application that I created and used to set up an RCT. The users of the app were given access to curated articles on key political issues and were regularly asked about their views on those issues. Some randomly selected users were allowed to select the news source from which to read an article; others were given randomly selected articles. The users who selected their news sources showed larger changes in their policy views and were less likely to have radical policy views-an alleviation of polarization-in comparison with those who read randomly provided articles. The belief updating and media selection patterns are consistent with the model's predictions, suggesting that the mechanism explained in the model is plausible. The findings suggest that the designers of news curation algorithms and their regulators should consider the readers' familiarity with news sources and its consequences on polarization. The second chapter, coauthored with Matt Lowe, investigates whether there would be less polarization if politicians were physically integrated. This chapter tackles this question by exploiting random seating in Iceland's national Parliament. Since almost all voting is along party lines, we use a text-based measure of language similarity to proxy for the similarity of beliefs between any two politicians. Using this measure, we find an in-coalition effect: language similarity is greater for two politicians that share the same political coalition (government coalition or opposition) than for two politicians that do not, suggesting that the measure captures meaningful partisan differences in language. Next, we find that when two MPs randomly sit next to each other, their language similarity in the next parliamentary session (when no longer sitting together) is significantly higher, an effect that is roughly 16 to 25 percent of the size of the in-coalition effect. The persistence of effects suggests that politicians are learning from their neighbors, not just facing transient social pressure. However, this learning does not reflect the exchange of ideas across the aisle.- The effects are large for neighbors in the same coalition group, at 29 to 53 percent of the in-coalition effect, with no evidence of learning from neighbors in the other group. Based on this evidence, integration of legislative chambers would likely slow down, but not prevent, the ingroup homogenization of political language. The third chapter examines how the news media affects news consumers' perceptions about the importance of political issues via their editorial choices of which articles to emphasize, and how such an agenda setting effectcan influence readers' political attitudes. This chapter reports on a preliminary analysis of a pilot study of a randomized controlled trial conducted on Amazon Mechanical Turk (MTurk). There are two potential causal mechanisms through which editorial choices of article prominence can influence subjective issue importance-(i) readers' behavioral biases such as cognitive fatigue and short-term memory congestion can lead to selection of salient articles at prominent positions (salience), (ii) prominence of articles reflects the subjective issue importance of news editors, which can guide the readers to select to read such articles (guidance). I find both salience and guidance mechanisms to influence article selection. There is suggestive evidence that article selection, and subsequent exposure to the content, results in changes in readers' subjective issue importance. This pilot study successfully reveals important-yet surmountable-limitations of the study; lessons from the pilot study will be incorporated in the full-scale experiment. / by Donghee Jo. / Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2014. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 131-134). / This dissertation examines the question of how to improve the access to higher education for students from disadvantaged socioeconomic backgrounds, in order to promote equality of opportunity. In order to do so, experimental evaluation methodology is used to address relevant research questions and draw actionable policy lessons in the context of the Chilean higher education system. The first chapter of this dissertation studies the impact of college peers on academic performance with the help of a natural experiment in Chile, which allows for exogenous classroom composition. In particular, first year students at the Pontificia Universidad Católica de Chile, one of the leading Chilean universities, are randomly assigned to their first semester college class groups. I take advantage of this feature in order to robustly estimate the impact of peer characteristics on undergraduate academic performance. The research hypothesis is that being assigned as a freshman to a group with more or less students from a same school, or from a given socioeconomic background, may result in very different patterns of adaptation, potentially impacting academic performance. Significant evidence is found that suggests that, contrary to the results found in most of the existing literature, the average college admission score of first semester classmates not only has no positive impact on the academic performance of undergraduate students, but may actually be negatively affecting their grades. Also, although there are some differences across degrees and secondary school types, in general undergraduate students are more likely to be dismissed, and have lower grades, when they share their first semester college class with a secondary schoolmate. Moreover, students assigned to first semester college classrooms with a higher concentration of classmates who attended the same secondary school(s) generally have significantly lower grades, and are less likely to graduate. Finally, students sharing their first semester college classroom with students from public or subsidized secondary schools are more likely to be dismissed due to poor academic performance. The fact that these peer effects are persistent In time points to the existence of a path dependence pattern, suggesting that this initial period in college is key for student adaptation. These findings have important implications for the design of policies intended to improve the adaptation of freshman college students and the access to higher education, suggesting that students would benefit from targeted first semester college class group assignment policies, as well as from additional transitional aid tailored to their profiles. The second chapter addresses the question of how to distinguish "knowledge" from "ability", in the context of improving the access to higher education. In particular, according to the existing evidence some higher education admission tests may be screening out students who, despite a relative lack of specific knowledge, possess as much intellectual ability as their peers. If this is the case, students from disadvantaged socioeconomic backgrounds are likely to be disproportionately affected, since they generally receive a primary and secondary education of worse quality than their better-off peers, often resulting in significant knowledge gaps. Also, although in some cases these formative shortcomings might be too large to be feasibly addressed at the time of enrollment in higher education, it is plausible to think that in some cases they may perhaps be relatively easy to remedy. In view of all this, in this chapter I present a diagnostics experiment, aimed at helping to better understand this issue. In particular, I custom-designed a multiple-choice test, intended to measure an individual's mathematical ability, while minimizing the reliance on previously acquired knowledge. Also, I put together a two page "cheat sheet", which outlined all the necessary concepts to successfully complete the exam, without providing any explicit answers. This test was subsequently used to evaluate the candidates applying for admission into a special access program at one of the leading Chilean universities. A staged randomized control trial was used to measure the difference in academic performance (i.e. number of correctly answered questions) across the three parts of the exam between students who received a "cheat sheet" after the first or second parts of the test, respectively. As expected, "cheat sheets" improved the average performance of candidates on the exam, but their impact varied considerably across individuals. Most importantly, "cheat sheets" proved significantly more beneficial (in terms of improved test performance) to those students who were more likely to have had a secondary education of lower quality. This result has important implications for educational policies in Chile and elsewhere, suggesting that a transition to ability-focused admission tests would facilitate the access to higher education for talented students from disadvantaged backgrounds. The third and final chapter of this dissertation presents a higher education special access program for students from disadvantaged socioeconomic backgrounds, custom-designed by the author for one of the leading Chilean universities, and implemented as a pilot during the 2013 and 2014 admission periods. A non-experimental comparison of the academic performance of special and ordinary admission students after enrollment finds evidence that, consistent with Arcidiacono et al (2011), although on average special admission students have comparable final grades than their ordinary admission peers, they tend to perform comparatively worse in "hard" subjects (i.e. those with a strong mathematical component). However, although special admission students seem more likely to decide to withdraw earlier, no significant differences in voluntary withdrawal or dismissal rates are observed between the latter and their ordinary admission peers. Moreover, an initial gap in GPA between special and ordinary admission students is closed by the end of the third semester of enrollment. All this suggests that, with some nuances, students from disadvantaged socioeconomic backgrounds can successfully catch up with their peers when provided with adequate support, and that special admission programs can therefore be an effective tool to improve the access to higher education. Nonetheless, the fact that the program was undersubscribed suggests that, apart from potential information diffusion problems, the minimum requirements set forth for special admission may have been too stringent, and/or that the demand for special admission among the targeted student population may not be as large as predicted. / by Sandro Diez-Amigo. / Ph. D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1997. / Includes bibliographical references (p. 101-103). / by Jeffrey D. Kubik. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1992. / Includes bibliographical references (leaves 162-165). / by Bruno Boccara. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2009. / Includes bibliographical references. / This thesis is a collection of essays on contract theory and behavioral economics. Chapter 1 proposes a model of choice under risk based on imperfect memory and self-deception. The model assumes that people have preferences over their own attributes and can, to some extent, manipulate their memories. It leads to a non-expected utility representation and provides a unified explanation for several empirical regularities: non-linear probability weights, small-stakes risk aversion, regret and the competence hypothesis. It also leads to endowment and sunk cost effects. The model implies that behavior will converge to the one predicted by expected utility theory after a choice has been made a sufficiently large number of times. Chapter 2 develops a model of competition with non-exclusive contracts in a market where consumers are time-inconsistent. Non-exclusivity creates a stark asymmetry between immediate-costs goods and immediate-rewards goods. In the former, non-exclusivity does not affect the equilibrium and, when consumers are sophisticated, the efficient allocation is achieved. When consumers are partially naive, the optimal sales tax may be either positive or negative and depends on parameters that are hard to estimate. In the case of immediate-rewards goods, however, the equilibrium features marginal-cost pricing and is always Pareto inefficient. Moreover, the optimal tax does not depend on the consumers' degree of naivete and is a function of parameters that are easy to assess. Chapter 3 is based on a joint work with Aloisio Araujo and Humberto Moreira. It considers a job-market signaling model where signals convey two pieces of information. / (cont.) The model is employed to study countersignalling (signals nonmonotonic in ability) and the GED exam. A result of the model is that countersignalling is more likely to occur in jobs that require a combination of skills that differs from the combination used in the schooling process. The model also produces testable implications consistent with evidence on the GED: (i) it signals both high cognitive and low noncognitive skills and (ii) it does not affect wages. Chapter 4, which is also based on joint work with Aloisio Araujo and Humberto Moreira, characterizes incentive-compatibility in models where types are multidimensional and the single-crossing condition may not hold. This characterization is used to obtain the optimal contracts in multidimensional screening as well as the equilibria in multidimensional signaling models. Then, I determine the implications of signaling and screening models when the single-crossing condition is violated. I show that the unique robust prediction of signaling is the monotonicity of transfers in (costly) actions. Any function from the space of types to the space of actions and an increasing transfer schedule can be rationalized as an equilibrium profile of many signaling models. Apart from the monotonicity of transfers in actions, I obtain an additional necessary and sufficient condition in the case of screening. In one-dimensional models, this condition states that the principal's profit as a function of the agent's type must grow at a higher rate under asymmetric information than under symmetric information. / by Daniel Gottlieb. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1994. / Includes bibliographical references. / by Peter Lewis Klibanoff. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics and Social Science, 1964. / Vita. / Includes bibliographical references (leaves 244-249). / by Francis M. McLaughlin. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 235-248). / This thesis consists of three chapters on the macroeconomic implications of financial frictions. The first chapter investigates the implications of student loan debt on labor market outcomes. I begin by analytically demonstrating that individuals under debt tend to search less and end up with lower-paid jobs. I then develop and estimate a quantitative model with college entry, borrowing, and job search using NLSY97 data to evaluate the proposed mechanism under the fixed repayment plan and the income-based repayment plan (IBR). My simulation suggests that the distortion of debt on job search decisions is large under the fixed repayment plan. IBR alleviates this distortion and improves welfare. In general equilibrium, debt alleviation achieved through IBR effectively offers a tuition subsidy that increases college entry and encourages firms to post more jobs, further improving welfare. The second chapter, joint with Winston Dou, proposes a dynamic corporate model in which firms face imperfect capital markets and frictional product markets. We highlight the importance of the endogeneity of the marginal value of liquidity in determining the interactions between investment, financing and product price setting decisions. The model implies several testable predictions: (1) financially constrained firms are more inclined to increase their desired markups of products; (2) firms facing larger price stickiness tend to issue less external equity and conduct less big payouts; and (3) a large part of the cost from price stickiness is induced by financial frictions. Lastly, we provide stylized facts consistent with our model's predictions. The third chapter (joint with Era Dabla-Norris, Robert Townsend, and Filiz Unsal) develops a general equilibrium model with three dimensions of financial inclusion, depth, and intermediation efficiency. We find that the economic implications of financial inclusion policies vary with the source of frictions. In partial equilibrium, we show analytically that relaxing each of these constraints separately increases GDP. However, when constraints are relaxed jointly, the impacts on the intensive margin (increasing output per entrepreneur with access to credit) are amplified, while the impacts on the extensive margin (promoting credit access) are dampened. In general equilibrium, we discipline the model with firm-level data from six countries and quantitatively evaluate the policy impacts. / by Yan Ji. / 1. Job Search under Debt: Aggregate Implications of Student Loans -- 2. External Financing and Customer Capital: A Financial Theory of Markups -- 3 Distinguishing Constraints on Financial Inclusion and Their Impact on GDP, TFP, and Inequality. / Ph. D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2018. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 165-171). / This thesis consists of three essays covering aspects of student financial aid. The first and third chapters put emphasis on the use of preference estimation and centralized admission systems as a key ingredient to answer policy relevant questions. The second chapter deals with the labor market consequences of student loans. In the first chapter, I study spillover of free college to students currently receiving generous financial aid. I show that free tuition increases demand for selective programs, making these programs more competitive and pushing them out of reach for many low-income students who would have qualified otherwise. The argument uses a combination of reduced-form regression-discontinuity estimates of enrollment elasticities and a structural model that captures general equilibrium effects. Estimates using Chilean administrative records suggest that 20% of currently enrolled poor students will lose seats to wealthier students under a free-tuition policy. This adverse effect on low-income students could be mitigated by complementary policies such as capacity investments and means-testing. However, crowd-out remains significant unless aggressive policies to counteract it are enacted. The second chapter, written jointly with Dante Contreras and Pablo Mufioz, studies the labor market returns to a state guaranteed loan (SGL) used to finance university. Using nationwide administrative data from Chile and a regression discontinuity design, we find that nine years after high school graduation, students who enrolled at a university thanks to the SGL gain 5 years of university while giving up 3 years of vocational education. In spite of this educational upgrading and the increase in the amount of debt, these students exhibit similar early labor market outcomes than ineligible students. We find no impact of this policy on wages, employment, work in the public sector, or type of employer. Low graduation rate and overall quality of the universities where treated students are admitted account for part of these null effects. In the third chapter, I use previous school preference estimates to simulate the consequence of a free-tuition proposed for K-12 in Chile that would be combined with the introduction of a centralized admission system that incorporates a quota for low-income students. / by Alonso Bucarey. / Ph. D.