Empirical and theoretical topics in applied microeconomics are discussed in this dissertation. The first essay identifies and measures managerial advantages from access to high-quality deals in venture capital investments. The underlying social network of Harvard Business School MBA venture capitalists and entrepreneurs is used to proxy availability of deal access. Random section assignment of HBS MBA graduates provides a key exogenous variation for identification. Being socially connected to peer venture capital firms and private equity seeking startups leads to more deal flow, larger asset under management and better performance in the inaugural funds of HBS-executive run venture capital firms. The second essay presents a two-stage model of competing ad auctions. Search engines attract users via Cournot-style competition. Meanwhile, each advertiser must pay a participation cost to use each ad platform. Advertiser entry strategies using symmetric Bayes-Nash equilibrium that lead to the Vickrey-Clarke-Groves outcome of the ad auctions are derived. Consistent with the model predictions, empirical evidence shows that multi-homing advertisers are larger than single-homing advertisers. Comparative statics on consumer choice parameters, quality, and user welfare are used to analyze the prospect of joining auctions to mitigate participation costs. The analysis provides conditions when such joins do and do not increase welfare. The third essay develops and computes a dynamic model of search in internet advertising. Micro-level browsing data from Microsoft's Bing.com (formerly known as Live.com) is used for structural estimations. The model predicts that users do not click on any ad with weak signals due to accumulating search cost and monotonicity of the value function. Rational search reveals a cascading pattern: the user clicks on a sufficiently high, highest-signal ad first, then moves on to the ad with the next highest conditionally expected probability of match once his assessment on the current ad degrades over time. The user exits when maximum assessment of likelihood of match over all ads is below a threshold value. The essay provides a novel approach to understanding rational herding behavior when product quality is only partially unraveled.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / The literature shows that increases in incomes lead to changes in the allocation of income or expenditure shares to different food products. The purpose of this thesis is to identify the effect of income on expenditure share allocations among different food groups. The study was particularly interested in beans and how changes in incomes affect the share of bean expenditures. We used data from the 2010 Zambia Living Conditions Monitoring Survey (LCMS). The LCMS covers the whole country and provides segmentation of the respondents, across the region and rural versus urban. It also provides detailed information on the income and expenditure distributions of respondent households. This allowed for the achievement of the overall objective of this thesis: understanding how beans and other food products responded to income changes as well as other demographic and socio-economic variables. The food share is the proportion of total household income that was allocated to food. The results show that food averages about 40% of income but varied significantly across the four income groups. It was 92% for those earning less than ZMW300 per month and 37% for those earning between ZMW300 and ZMW750 per month. It was down to 22.6% for those earning between ZMW750 and ZMW2.1 million per month had a food share of total income of only 10.8%, similar to the average U.S. consumer. These averages were found to be statistically different across the income groups. We found that Zambians allocated about 40% of their food expenditure to cereals compared to 5% to pulses and 3.5% to beans. They allocated a higher proportion of their food expenditure to fruits and vegetables than to beans and/or to pulses. This shows that legumes are very low on the food hierarchy in Zambia. However, across income categories, it was found that consumers in the second income group (ZMW300 and ZMW750 per month) allocated the most of their food expenditure to beans, about 3.9%, while those in the highest income group (ZMW750 and ZMW2.1 million per month ) allocated the least, about 3%. The biggest influencing demographic factor for pulses and beans’ shares of food expenditure was locale, with urban consumers having about 1.1 and 0.8 percentage points higher share of food expenditures allocated to beans than rural consumers. The respective t-values were 15.58 and 16.96. All the demographic and socio-economic variables were statistically significant at or below the 5% level. There was no difference between the allocation of people in the highest income group and those in the lowest income group. The results suggest that if the long-term objective is to reap the nutritional benefits of beans, there may be value in focusing on two principal policy variables: education and income enhancement. However, because education is correlated with income, the benefits of undertaking this policy initiative would more than benefit the bean consumption. It should unleash across the economy a more productive workforce that understands the health benefits of its food choices.

Master of Agribusiness / Department of Agricultural Economics / Vincent Amanor-Boadu / Order picking errors have an adverse effect on performance because they contribute to lost time, resources and customer loyalty. Therefore, it is imperative that organizations reduce errors as much as possible. However, organizations cannot effectively reduce errors until they understand the factors that determine and influence them and can isolate the sources of those errors. Product distribution at Frito Lay is very critical in the supply chain activities of the company and understanding and managing the level of errors that occur at the distribution phase of operations is critical for the firm’s long term sustained competitiveness. This study examines Frito Lay’s order filling processes and how order volumes affect the level of errors. The company uses two types of order picking technologies: prepick and bulk order, conventionally also known as pick-to-light and voice-pick technology respectively. The main objectives of the study are: (a) to examine the impact of size of volume processed at the distribution center on errors recorded for each order pick technology and (b) the impact of regional and seasonal differences across Frito Lay’s distribution network. The data pertaining to pre-pick volume, pre-pick error, bulk volume and bulk error were collected for ten consecutive quarters time period ranging from first quarter of 2009 to the second quarter of 2011 and across 16 divisional distribution centers in four regions of the U.S. The data were organized into a panel for analyses using Stata® 12.1. With no a priori foundation for choosing any particular structural equation form, a number of structural equations were estimated and compared to consistency with economic theory and internal consistency. Two different sets of models were estimated: one for each technology. The regression results from the analysis from the pre-pick order picking technology models showed the quadratic model was the “best” model, whereas the linear model turned out to be the “best” structural form for bulk order picking system. This research provides valuable information to management in attempt to address errors in the order fulfillment system. Because errors may be human, and these human errors may emanate from lack of knowledge or poor skills, they can be addressed with training and education. The human errors may also be a result of processes in the plant. These could be addressed by the reconfiguration of processes and educating people about those processes. Finally, the errors may be motivational, leading to poor focus in executing responsibilities. To address these types of errors, management may choose to implement both positive and negative incentives. Positive incentives will provide rewards to employees who meet error reduction targets that are established at the beginning of certain periods. Negative incentives may include penalties for exceeding pre-specified error thresholds. The Frito Lay system would benefit more from this research if the data had included human resource demographic data as well as economic information. It would have allowed the research to estimate the effect of errors on the economic performance of the different distribution centers and help determine the economically optimal level of errors at the different centers.

abstract: Mobile applications (Apps) markets with App stores have introduced a new approach to define and sell software applications with access to a large body of heterogeneous consumer population. Several distinctive features of mobile App store markets including – (a) highly heterogeneous consumer preferences and values, (b) high consumer cognitive burden of searching a large selection of similar Apps, and (c) continuously updateable product features and price – present a unique opportunity for IS researchers to investigate theoretically motivated research questions in this area. The aim of this dissertation research is to investigate the key determinants of mobile Apps success in App store markets. The dissertation is organized into three distinct and related studies. First, using the key tenets of product portfolio management theory and theory of economies of scope, this study empirically investigates how sellers’ App portfolio strategies are associated with sales performance over time. Second, the sale performance impacts of App product cues, generated from App product descriptions and offered from market formats, are examined using the theories of market signaling and cue utilization. Third, the role of App updates in stimulating consumer demands in the presence of strong ranking effects is appraised. The findings of this dissertation work highlight the impacts of sellers’ App assortment, strategic product description formulation, and long-term App management with price/feature updates on success in App market. The dissertation studies make key contributions to the IS literature by highlighting three key managerially and theoretically important findings related to mobile Apps: (1) diversification across selling categories is a key driver of high survival probability in the top charts, (2) product cues strategically presented in the descriptions have complementary relationships with market cues in influencing App sales, and (3) continuous quality improvements have long-term effects on App success in the presence of strong ranking effects. / Dissertation/Thesis / Doctoral Dissertation Business Administration 2015

abstract: This study focuses on three major Maghreb states (Algeria, Morocco and Tunisia) with distinct institutional, political and socioeconomic patterns. It essentially tackles the issue of technological development particularly investments, trade, human capital and patents in a socially and politically sensitive environment. The researcher assumes that government stability, law and order, GDP growth and ICT usage are related to technological innovation in the Maghreb. The stated hypotheses indicate that these political, institutional and socioeconomic factors have significant effect on technological innovation in the Maghreb. Based on a two equations' empirical model, our researcher attempts to test these effects and explore the interactions between the different dependent and independent variables through a set of hypotheses. Data analysis covers three countries from 1996 to 2010. The study identifies significant effects of key covariates on technological innovation in the Maghreb. Although not every predictor effect is consistent, the results indicate that they matter for technological innovation in the Maghreb. Empirical findings might constitute essential evidence for technology and innovation policies in this Middle East and North African region. / Dissertation/Thesis / M.S. Technology 2012

abstract: Hotel amenities and their influence on consumer choice have been extensively studied by academics. These have largely focused on consumer preferences vacation modes and the psychographic characteristics of travelers. Revenue managers make practical use of this information by attempting to match available hotel rooms with traveler demands for accommodations, setting prices that maximize profits for the hospitality company. The experienced revenue manger is able to determine the most profitable price schedule for a room types across many distribution channels. This study was conducted to test the use of choice modeling for objectively assessing dollar values of three basic amenities for consumers (room type, kitchen availability and price). Researcher used paired comparisons modeled as a conditional logit. This study used market segmentation and choice modeling to determine the value of amenities for an aggregate group and 16 more homogenous groups. Market segmentation and choice modeling allowed this study to segment markets into more homogenous groups, and by doing that allowed for calculation of customer willingness to pay for additional amenities. Results from this study confirm that customers are willing to pay for kitchen $65.43 on top of their room value. All responders generally agree to liking an extra bedroom in their hotel room and they are willing to pay $37.39 more than for a studio room. A surprising result is that it seems based on the results that responders generally do not like to have a second bedroom and they are not willing to pay for it. By knowing customer willingness to pay, it can be assured that customers always feel they are getting a high value out of the transaction and increase the likelihood of future transactions. The significance of this research is the concrete numbers that can be, and already have been, applied immediately in the hospitality industry, and is positively impacting business revenue and customer experience. / Dissertation/Thesis / M.S. Community Resources and Development 2014

Ubiquitous access to the Internet and supporting technologies gave birth to online labor markets (Malone and Laubacher 1998). Online labor markets enable employers (employers) to contract with professionals (service providers) from anywhere in the world. Firms now are able to greatly expand their workforce and bring a large arsenal of labor to bear on IT jobs, such as software or web development using Internet-enabled procurement platforms such as Freelancer. These markets serve as intermediaries for IT services (outsourcers post Call for Bids (CFBs) for services and providers offer bids for IT services) that help match employers with service providers across the globe. In my dissertation, I try to comprehensively study this Internet-enabled phenomenon from the perspectives of these three entities on global online markets with three separate yet related essays. The first essay focuses on the "global" nature of the market, and assess the effect of global frictions and global labor arbitrage on both provider bidding and employer selection. The second essay focuses on the effect of auction mechanism - sealed versus open bid auction - on providers' bidding dynamics, and the market performance. The third essay focuses on estimating true consumer (employer) surplus of online labor markets with a quality-adjusted measure. I also test its robustness by comparing its effects on consumers' subsequent transactions. I also find that market immaturity, consumers' lack of experience in the market, and consumers' lack of familiarity with IT service providers lead to the difference between the traditional measure and the quality-adjusted consumer surplus. / Business Administration/Management Information Systems

Master of Agribusiness / Agricultural Economics / Vincent R. Amanor-Boadu / The rapidly changing economic environment in the Democratic Republic of Congo (DR Congo) offers significant opportunities for businesses. The food and agribusiness sector is one of the major opportunities for growth given that increasing incomes are going to enhance the food and nutrition security needs of an increasing segment of the population. Animal protein in the form of chicken meat and eggs are relatively inexpensive and offer an opportunity for entry and differentiation in a markets located in DR Congo’s largest cities of Kinshasa and Kananga. This thesis uses the case of Z-CO Farm in DR Congo to explore the strategic opportunities for small-scale egg production in a low-income but growing country. Having been in operation for a number of years, Z-CO Farms has been producing chicken eggs for the general consumer market. This thesis explores the opportunity to differentiate the market that Z-CO Farms targets with the view to enhance its competitiveness, expand the market boundaries and create new value for customers that produce significant rewards. The off-take for the project is the creation of Blue Ocean markets for chicken eggs in a market that is increasingly exposed to food safety risks by assuring consumers a safe product. This project, when implemented, would be the first in DR Congo. However, would it be profitable? Under what conditions would it be profitable? We employ three primary methods to answer the foregoing questions. First, we evaluate the literature and the available secondary data. Second, we use an economic and financial model to develop the foundation for conducting the analyses for assessing the feasibility of building a small-scale table egg production system to address the emerging higher income consumers in DR Congo. We draw on the blue ocean strategy eloquently presented by Kim and Mauborgne for insight and guidance in building a unique product and service offering for the identified markets in Kinshasa and Kananga. We assess four strategies: the base scenario of the current market conditions where Z-CO maintains its commodity red ocean engagement in the market; innovating its feeding program for the birds; pursuing a market segmentation program whereby it offers high value food safety value proposition to the middle and upper-middle class of consumers; and a combination of a feed innovation and market segmentation initiative. The results show that while the first two strategies returned a positive net present value (NPV) in Kananga, they failed in Kinshasa. This is because of the level of competition in Kinshasa compared to Kananga as well as the cost of operations in the two locations. The results also show that while the remaining two strategies were profitable in both markets, they offered higher NPV and internal rates of return in Kananga than in Kinshasa. The best outcome in operating in both cities involved the fourth strategy, producing a combined NPV of about $493,867. The principal driver for this superior performance in Kananga is cost of feed. There is, therefore, value in thinking about how to leverage this cost advantage in Kananga to enhance the profitability in Kinshasa because of the population and income advantage in the latter. The study provides insights for the management of Z-CO to pursue their future investment planning and in selecting the locations and size of their operations to maximize their NPV and IRR. It also identifies the principal sources of risks that Z-CO’s management must avoid or effectively manage to achieve their desired business outcomes.

Master of Regional and Community Planning / Department of Landscape Architecture/Regional and Community Planning / John W. Keller / During the Industrial Revolution, economist Alfred Marshall published his classic book entitled Principles of Economics, in which he suggests that the external economies of scale (positive externalities) produced by the clustering of many small innovative businesses could rival the internal economies of scale achieved by a few large vertically-integrated businesses. The distinction between these two models of industrial organization, one based on many small innovative firms and the other based on a few large conglomerated firms, is the basis of cluster development theory. This distinction has been further developed in the economic development literature through the significant contributions of Schumpeter (creative destruction), Jacobs (necessary inefficiency), and Porter (diamond model). Modern cluster development theory expands upon the work of these classic theorists. Contributions relevant to this study include Markusen’s cluster typologies, Press and Feldman’s cluster lifecycle phases, Munnich’s rural knowledge cluster framework, and Doloreux’s case study of a rural innovation system. This case study applies the lessons of cluster development theory to an emerging cluster of businesses in Wamego, Kansas that share the common Wizard of Oz theme. While this cluster is not a “traditional” cluster (it does not benefit from positive externalities relating to product or process), it does create positive marketing externalities that significantly affect the local economy. This report names the cluster (Oz Cluster), identifies the typological structure of the cluster (hub and spoke), profiles the key actors and decisions which are shaping this emerging cluster, and concludes with lessons learned from the Oz Cluster and alternative scenarios for further cluster development. The Oz Cluster model of economic development demonstrates how communities can profit from niche-based tourism. Such economic development must focus on the establishment and growth of regionally competitive businesses with strategic competitive advantages. Alternative scenarios for further cluster development include: 1) expand the Oz theme; 2) diversify the cluster; and 3) maintain current level of success.

Master of Agribusiness / Department of Agricultural Economics / Arlo Biere / The objective of this thesis is to examine the factors that a producer will want to consider when choosing the milk cooling and storage system for the dairy farm. The two systems studied are the traditional, on-farm, bulk tank system and the more recently developed, direct tanker loading system that uses glycol chilling plates. As a long-term investment, the choice of the refrigeration and storage system will have an impact on at least four dimensions of the dairy business. The capital cost of the milk cooling/storage system can range from 2% to 5% of the total capital investment in the farm. Milk cooling costs can also account for as much as 25% of the farm’s total electric costs. The system selected can also have an impact on the hauling charges and the hauling charges can account for as much as 10% of the dairy’s gross revenue. Lastly, the storage system selected may influence the range of markets available to the producer as not all processors accept milk from farms using direct tanker loading. Using an economic engineering approach, three hypothetical farm sizes were considered: milking 700, milking 1,400, and milking 2,100 cows. Capital and operating cost data were collected from three major dairy equipment manufacturers that service the Upper Midwest. Capital expenses for each size farm were priced for conventional bulk tanks and then also priced for glycol plate chiller systems that load directly into tanker trailers. The comparison of annualized costs of ownership for all three farm sizes shows only minor differences in the two systems. For the 700 cow farm, a direct tanker loading system saved 0.24% over the total capital investment; for the 1,400 cow farm, a direct tanker loading system saved 0.97%; and for the 2,100 cow farm, a direct tanker loading system saved 1.19%. Thus, differences in hauling charges, which will vary with each situation, become critical to the choice. Because the overall cost of the two systems are so close, one can expect that the peripheral and non-economic issues may be much more influential on each producer’s decision. Given the known differences in hauling charges, one can conclude that for the 700 cow farm, conventional tanks would be the preferred choice. For the 1,400 cow farm and the 2,100 cow farm, the determining factors come down to the differences in hauling charges and long-term goals for the farm business.