Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2008. / Includes bibliographical references (p. 154-158). / This thesis is a collection of essays that uses theoretical and experimental methods to explore institutional persistence, contract structure, and authority. Chapter One studies the informational and efficiency properties of institutions that form to reduce moral hazard. While in the short run such mechanisms may be optimal, in the long run inefficient institutions may persist because information about changes in the underlying environment is lost. Using experimental and theoretical methods, it analyzes a market with high quality and low quality products that are indistinguishable without a costly certification process. Sellers in the market make endogenous production decisions and are heterogeneous in their levels of moral hazard leading to two possible equilibria-non-certifying and certifying-that vary in both efficiency and information about the underlying environment. The certifying equilibrium, which does not carry information about changes in the distribution of sellers, does not adjust when the underlying environment changes, perpetuating a market structure that makes all market participants weakly worse off. Chapter Two studies how changes in contract structure may help preserve antiquities. Most countries prohibit the export of certain antiquities. This practice often leads to illegal excavation and looting for the black market, which damages objects and destroys important aspects of the archaeological record. Chapter Two argues that many of the goals for export bans could be better accomplished through the use of long-term leases which would raise revenue for the country of origin while preserving national long-term ownership rights. Chapter Three uses experiments to study how control rights are distributed in a setting with incentive conflicts. / (cont.) It shows that while effort levels are consistent with theoretical predictions, principals retain control rights even when it is strongly in their interest to delegate. Chapter Three also documents a differential response to authority by gender. As agents, women have strong fairness preferences resulting in diminished effort in asymmetric treatments but higher effort in symmetric ones. As principals, women are more likely to transfer authority when it is efficient to do so. / Tom S. Wilkening. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1989. / Includes bibliographical references. / by James Douglas Montgomery. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2007. / Includes bibliographical references (p. 157-167). / This thesis is a collection of three essays on entry regulation, institutions, and development.Chapter 1 examines the effect of a business registration reform in Mexico on economic activity. This reform made registration procedures less complex and was implemented in different municipalities at different points in time, allowing for identification. I find that the reform increased the number of registered businesses in eligible industries. This increase was due to former wage earners opening businesses. Former unregistered business owners were not more likely to register their business after the reform. The results also show an increase in employment in eligible industries. Moreover, they indicate that the competition from new entrants lowered prices and decreased the income of incumbent businesses. Chapter 2, coauthored with Francisco Gallego, argues that within country variation in economic development across the Americas can be explained by differences in institutions that have their roots in the colonial era. Colonizers engaged in different economic activities in different regions of a country, depending on the local conditions and the supply of native labor. Some activities where "bad" since they created extractive institutions, while "good" activities created inclusive institutions. We show that areas with bad colonial activities have lower GDP per capita today than other areas. Areas with high pre-colonial population density also have lower GDP per capita today. The intermediating factor between history and current development appears to be institutions and not income inequality or the share of ethnic minorities. / (cont.) Chapter 3 uses the example of Mexico's Progresa and Microrregion programs to illustrate that one can arrive at very different conclusions about the relative cost-effectiveness of public development programs, depending on the assumptions made about social opportunity costs. For Progresa, I estimate the amount of US$ required to save one life per 1000 live births to be 14.1. For the Microrregion Program, this number could fall anywhere between 7.6 and 29. The main challenge is that social opportunity costs are not necessarily equal to market prices in the presence of market failures, and that we currently lack good guidelines for how to address this issue in applied work. / by Miriam Bruhn. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics and Social Science, 1961. / Includes bibliographical references (leaves [265]-269). / by Michael Gurevitch. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1996. / Includes bibliographical references (p. 90-91). / by Jason Abrevaya. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1989. / Includes bibliographical references (leaves 162-165). / by Gary William Loveman. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2007. / Includes bibliographical references. / This dissertation consists of three chapters on financial market imperfections, in particular, information imperfections. Chapter 1 studies how the existence of a fixed cost per transaction faced by uninformed investors hampers information revelation through price and exacerbates adverse selection. The exacerbated adverse selection explains one long-standing puzzle in finance - the momentum anomaly. Properly adjusting stock returns for adverse selection by using data on trading volume substantially mitigates momentum-based arbitrage profits for the sample period from 1983 to 2004. Chapter 2 studies how information asymmetry prevents perfect risk-sharing and offers insights on stock return behavior. Chapter 3 explores the idea of Tobin's tax in the context of an emerging market and in particular examines the cost effects on speculation in the Chinese stock market. / by Ding Wu. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2010. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This dissertation consists of three essays that examine the impact of tax policy of firm behavior. The first chapter uses new well-level production data on California oil wells and after-tax producer prices to estimate how temporary taxes affect oil production decisions. Theory suggests that temporary taxes could lead producers to shut wells, and more generally that they create strong incentives for retiming extraction of the exhaustible resource to minimize tax burdens. The empirical estimates suggest small estimates of extensive responses to after-tax prices, meaning that wells are rarely shut, but they also suggest substantial retiming of production for operating wells. While the estimates vary with specifications, the elasticity of oil production with respect to the after-tax price is estimated to fall between 0.208 and 0.261. The estimates are used to calibrate a simple model of the efficiency cost of tax-induced distortions relative to the no-tax optimal extraction path. Calculations suggest that a 15 percent temporary excise tax on California oil producers reduces the present value of producer surplus by between one and five percent of the no-tax surplus or between 113 and 166 percent of the government revenue raised, depending on the original life of the well and the duration of the temporary tax. The second chapter examines the impact of the federal R&D tax credit on research spending during the 1981-1991 period using both publicly available data from 10-Ks and confidential data from federal corporate tax returns. The key advance on previous work is the use of an instrumental variables strategy based on tax law changes that addresses the potential simultaneity between R&D spending and its user cost. The results yield a range of estimates for the effect of tax incentives on R&D investment. Estimates using only publicly available data suggest that a ten percent tax subsidy for R&D yields on average between $3.5 (0.24) million and $10.7 (1.79) million in new R&D spending per firm. Estimates from IRS SOI data suggest that a ten percent reduction in the user cost would lead the average firm to increase qualified spending by $2.0 (0.39) million. Estimates from the much smaller merged sample suggest that qualified spending is responsive to the tax subsidy. A similar response in total spending is not statistically discernible in the merged sample. The inconsistency of estimates across datasets, instrument choice and specifications highlights the sensitivity of estimates of the tax-price elasticity of R&D spending. How a corporate tax reform will affect a firms reported earnings in the year of its enactment, and how the firm may choose to react to the tax reform, depend in part on the sign and magnitude of the firms net deferred tax position. The final chapter, written jointly with Jim Poterba and Jeri Seidman, compiles new disaggregated deferred tax position data for a sample of large U.S. firms between 1993 and 2004. These data are used to assess the size and composition of deferred tax assets and liabilities and their magnitudes relative to the book-tax income gap. We find that temporary differences account for a substantial share of the book-tax income gap. The key contributors to the increase in the book-tax gap include mark-to-market adjustments, property and valuation allowances. In interpreting the data we collect on deferred tax assets and liabilities in the context of the behavioral incentives surrounding a tax rate change, we find that a pre-announced reduction in the corporate tax rate would give a third of the firms in our sample to a strong incentive to accelerate income to the high-tax period, contrary to typical expectations that fail to take deferred tax positions into account. / by Nirupama S. Rao. / Ph.D.

Thesis (Ph.D.) Massachusetts Institute of Technology. Dept. of Economics, 1949. / Vita. / Bibliography: leaf 91. / by Harold Jack Leavitt. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2010. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This thesis investigates the effects of online advertising on human behavior: clicks, new-account sign-ups, and retail sales. Five chapters cover natural and field experiments used to measure these effects for both display and search advertising. The first chapter uses a natural experiment on the Yahoo! Front Page, aided by a flexible semiparametric model, to identify the causal effects of display ad frequency on internet users' responses as measured at the individual level by clicks and new-account sign-ups. Performance is heterogeneous regarding frequency and clickability; some campaigns exhibit significant decreasing returns to scale after one or two impressions while others show constant returns to scale even after fifty impressions. For some campaigns, a simple nonparametric regression which ignores selection bias finds increasing returns to scale, but none is found with the model that uses exogenous variation in views. Conversely, many campaigns that appear to exhibit diminishing returns when failing to account for selection, in fact, show little to no wear-out. The second chapter assesses the ability of online display advertising to attract new customers by analyzing a large-scale field experiment which exposed 3.7 million subjects to ads on Yahoo!. The number of new account sign-ups at an online business was tracked and shows a statistically significant impact of one of the two types of advertising campaigns. The ads served as Yahoo! run-of-network succeeded in generating a statistically significant increase in sign-ups of 8-14% relative to the control group. The ads shown on Yahoo! Mail did not produce a statistically significant increase in sign-ups. Despite being derived using millions of subjects, this estimate is quite noisy, with the upper bound of the 95% confidence interval estimate being a 15% increase in new customers. These estimates call into question click-only attribution models, as the number of users that clicked on an ad and converted is less than 30% of the estimated treatment effect. The third chapter asks, "Does advertising affect sales in a measurable way?" New technologies for tracking both sales and advertising at the individual level are used to investigate the effectiveness of brand advertising for a nationwide retailer. A controlled experiment on 1,577,256 existing customers measures the causal effect of advertising on actual purchases, overcoming the major hurdles regarding attribution typically encountered in advertising effectiveness research by exogenously varying exposure to the ads. Each customer was randomly assigned to treatment and control groups for an online advertising campaign for this retailer. Online brand advertising generated a statistically and economically significant effect on in-store sales for this retailer. The design of the experiment permits a demographic breakdown of the advertising's heterogeneous effects. Somewhat surprisingly, the effects are especially large for the elderly. Customers aged 65 and older, comprising only 5% of the experimental subjects, exhibited a 20% average increase in sales due to the advertising campaign, which represents 40% of the total effect among all age groups. The fourth chapter further investigates the effects of online advertising on sales. A quasi experimental approach is taken to analyze the randomized experiment in Chapter 3. Individual level data on ad exposure and weekly purchases at this retailer, both online and in stores, are combined and used to find statistically and economically significant impacts of the advertising on sales. The treatment effect persists for weeks after the end of an advertising campaign, and the total effect on revenues is estimated to be more than seven times the retailer's expenditure on advertising during the study. Additional results explore differences in the number of advertising impressions delivered to each individual, online and offline sales, and the effects of advertising on those who click the ads versus those who merely view them. The fifth chapter quantifies the externalities exerted among competing north ads in search advertising. "North" ads, or sponsored listings appearing just above the organic search results, generate the majority of clicks and revenues for search engines. The research question asks, "Does increasing the number of rival north ads decrease the number of clicks I receive on my own north ad?" A controlled experiment investigates this question and finds, surprisingly, that additional rival ads in the north tend to increase rather than decrease the click-through rate (CTR) of the top sponsored listing. Several possible explanations are proposed for this phenomenon, and directions for new theoretical models of sponsored search are suggested. / by Randall A. Lewis. / Ph.D.