Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2009. / "June 2009." / Includes bibliographical references. / This dissertation contains three essays on household decision making in the areas of education and health in developing countries. The first chapter explores intra-household decision making in the context of conditional cash transfer programs in education. This study provides an empirical test of whether the recipient of the incentive-either the parent or the child-affects outcomes. I conduct this test through a field experiment in Gurgaon, India where an incentive to achieve a specific reading goal was randomly assigned to be received by either the parent or by the child. I find that incentives to parents result in worse outcomes than incentives to children when parents are less productive in their children's education, measured through lower initial test scores. Conversely, incentives to parents result in better outcomes when parents are more productive, measured through higher initial test scores. In the second chapter, written jointly with Leigh Linden, we estimate the effects of peer networks on the enrollment and attendance patterns of children in a community-based education program in India. The program is open to all out-of-school children, and we randomly assign a subset of the eligible children to be actively encouraged to participate. We find that active encouragement increases participation among selected children by 30 percentage points. Having a treated friend increases participation by about 20% of the main effect. / (cont.) The effect of treated friends comes primarily from bilateral ties, where both the child and his friend indicate that they spend time with each other. The third chapter, written jointly with Nava Ashraf and Jesse Shapiro, explores how households make decisions to purchase and use health products in developing countries. This study tests whether higher prices can increase use, either by targeting distribution to high-use households (a screening effect), or by stimulating use psychologically through a sunk-cost effect. We develop a methodology for separating these two effects. We implement the methodology in a field experiment in Zambia using door-to-door marketing of a home water purification solution. We find that higher prices screen out those who use the product less. By contrast, we find no consistent evidence of sunk-cost effects. / by James W. Berry. / Ph.D.

Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Economics, June 2012. / "June 2012." Cataloged from PDF version of thesis. / Includes bibliographical references (p. 120-122). / We explain often anomalous results of capital structure tests by infusing tradeoff theory with real options. Of course one can explain almost everything using a soft qualitative theory. This paper's addition is to use a quantitative approach to generate tradeoff theory predictions for firms with valuable real options. We are able to explain many of the results of Rajan and Zingales (1995), Welch (2004), and Flannery and Rangan (2006). / by William T. Shore. / S.M.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2003. / Includes bibliographical references. / This thesis analyzes several aspects of the Industrial Organization of the airline industry in three separate chapters. Chapter 1 investigates the effect of air traffic delays on airline prices. The degree to which prices respond to changes in service quality should depend on consumers' willingness-to-pay for quality, as well as the availability of substitute products. I study the effect of an exogenous variation in on-time arrivals, as one dimension of service quality in the airline industry, on prices for airline travel. The effect is identified from a legislative change in takeoff and landing restrictions at La Guardia Airport in New York City in the year 2000. I find that prices drop in reaction to longer flight delays. The price response is larger when a close substitute flight is available. Increased flight delays at La Guardia have a positive effect on prices at other New York City Metropolitan Area airports, which offer substitute products. In quantile regressions on thedistribution of prices, I show that prices at the upper end of the distribution react more strongly to flight delays. In Chapter 2, I study how airline passenger complaints are related to actual and expected service quality of air carriers. In contrast to the existing studies on customer complaints, I do not derive consumers' expectations from survey data. Instead, I use the best prediction at the time of purchase given the information available at that time as the consumer's rational expectation of service quality. I find that passengers file more complaints when an airline's actual service quality is lower and when expected quality is lower. These effects are quite robust across different econometric specifications. Considering the magnitudes of the effects, I find that the effects of actual quality and of expectations on complaints are of similar magnitude. Chapter 3 tries to understand the recent market entry and expansion by a group of small carriers, often labeled low-cost carriers. As a first step in analyzing the competitive strategy of these carriers, we investigate the effect of a carrier's and its competitors' existing presence at the endpoints of a routes on the likelihood of entry. / by Silke I. Januszewski. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2014. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 149-152). / The dissertation considers three topics in dynamic games and mechanism design. In both problems, asymmetric information causes inefficiency in production and allocation. The first chapter considers the inefficiency from the principal's inability to observes the agent's effort or cost of effort, and explores its implication to the principal's response to the combination of the output and the signal about the cost of effort. For example, the principal may punish the agent more harshly for low output when signals suggest that cost of effort is high when the effort is of high value for the principal. This chapter also classifies the long-run behavior of the relationship between the principal and the agent. Depending on whether the agent is strictly risk-averse and whether he is protected by limited liability, the state of the relationship may or may not converge to a stationary state and the stationary state may nor may not depend on the initial condition. The second chapter considers the re-allocation of assets among entrepreneurs with different matching qualities, which contributes to the growth of the whole economy. Due to reasons that are not explicitly modeled, assets are not automatically allocated to entrepreneurs who are best at operating them from the beginning, and this inefficiency is combined with inefficiency in the asset market and potential imperfection of labor contracting. When asset re-allocation can become a main source of economic growth, this chapter argues that imperfection in the labor contracting environment may boost the economic growth. The third chapter assumes that the agent's output is contractible but he can privately acquire more information about his cost of production prior to contracting. Compared to the optimal screening contract, the principal's contract in this case must not only induce the agent to "tell the truth", but also to give the agent the incentive to acquire appropriate amount of information. This may create distortion of allocation to the most efficient type and whether this happens is related to the marginal loss incurred by the principal from the cost of information acquisition. / by Ruitian Lang. / Ph. D.

Massachusetts Institute of Technology. Dept. of Economics and Social Science. Thesis. 1965. Ph.D. / 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, Dept. of Economics, 1991. / Includes bibliographical references (leaves 216-227). / by Jonathan Lamont Walker. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1997. / Includes bibliographical references (p. 135-141). / by Marci K. Castillo. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1997. / Includes bibliographical references (p. 80-82). / by Matthew Barmack. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2017. / Cataloged from PDF version of thesis. / Includes bibliographical references (pages 177-184). / This thesis consists of three chapters broadly in industrial organization, with a focus on contests and auctions, and game theory. Chapter 1 develops a new model of multistage R&D procurement contests, in which firms conduct research over a number of stages to develop an innovative product and then supply it to a procurer. I show that the primitives of this model-the cost of research, the distributions of project values and delivery costs, and the share of the profits captured by the firms-are non parametrically identified given data on R&D expenditures and procurement contract amounts. I then develop a tractable estimation procedure and apply it to data from the Small Business Innovation Research program in the Department of Defense. I find that within a particular contests, there is low variation in the values of the proposed projects, which are drawn early in the process, but considerably larger variation in the delivery costs, which are drawn later. The DOD provides high-powered incentives, sharing about 75% of the surplus with the firms. I then suggest simple design changes to improve social surplus but find that many of these socially beneficial design changes would in fact reduce DOD profits. Chapter 2, which is joint with James Roberts and Andrew Sweeting, studies the benefits of regulating entry into procurement auctions, relative to standard auctions in which bidders are allowed to enter and bid freely. Specifically, we study the relationship between auction outcomes and the precision of information bidders have about their costs before entering the bidding stage of the contest. We show that the relative performance of a standard auction with free entry and an "entry rights auction," which restricts participation in the bidding phase, depends non monotonically on the information precision. We finally estimate the model on a dataset of auctions for bridge-building contracts let by the Oklahoma and Texas Departments of Transportation. Entry is estimated to be moderately selective, and the counterfactual implication is that an entry rights auction would significantly increase social efficiency and reduce procurement costs. Chapter 3, which is joint with Lucas Manuelli and Ludwig Straub, proposes a model of "signal distortion" in a game with imperfect public monitoring. We construct a framework in which each player has the chance to distort the true public signal, and each player is uncertain about the distortion technologies available to his opponent. Continuation payoffs are dependent on the distorted signal. Our main result is that when players evaluate strategies according to their worst case guarantees-i.e., are ambiguity-averse over certain distributions in the environment-players behave as if the continuation payoffs that incentivize them in the stage game are perfectly aligned with their opponents'. We then provide two examples showing counterintuitive implications of this result: (i) signal structures that allow players to identify deviators can be harmful in enforcing a strategy profile, and (ii) the presence of signal distortion can help sustain cooperation when it is impossible in standard settings. We then extend our equilibrium concept to a repeated game, show that it is a natural generalization of strongly symmetric equilibria, and then prove an anti-folk theorem that payoffs are in general bounded away from efficiency. / by Vivek Bhattacharya. / 1. An Empirical Model of R&D Procurement Contests -- 2. Regulating Bidder Participation in Auctions -- 3. Imperfect Public Monitoring with a Fear of Signal Distortion. / Ph. D.