This dissertation consists of three essays studying the dynamic and strategic interactions of oligopolistic firms in developing countries using dynamic structural models. We focus on industries which have positive social benefits for the communities in which they operate, namely radio and banking. We use the estimated models to simulate counterfactual policies aimed at improving access for individuals in underserved areas. The first essay studies the social impacts of the liberalization of the radio broadcasting sector in Ghana. I analyze how the regulator affects commercial stations' decisions to enter and the resulting effects of coverage spillovers in rural areas. I exploit random variation in radio coverage caused by coverage spilling through gaps in mountainous areas and use this to estimate the effects of coverage on malaria incidence and development. I then estimate a dynamic structural entry model for commercial stations. In counterfactual simulations, I find that the allowance of more powerful transmitters is particularly effective in delivering the social benefits of radio to new communities. The second essay (joint with Calixte Ahokossi) studies voter turnout and regulatory inefficiency in the radio broadcasting market in Benin. We find an inverted-U relationship between the number of radio stations and voter turnout. We estimate a dynamic structural model for radio stations, taking into account the regulatory inefficiency in the market. Counterfactual simulations suggest that either removing the regulatory inefficiency or introducing targeted entry subsidies can spur entry in areas without radio stations, which would increase voter turnout in these areas. The third essay (joint with Marc Rysman and Robert M. Townsend) studies the banking sector in Thailand. Here, we argue that the effect of financial crises on bank branch location choices provides an unexplored channel by which crises affect access to credit. We estimate a dynamic structural model of oligopolistic location choice, allowing for complementarity in payoffs for bank branches in nearby locations, as well as competitive effects between rival banks. Using this model, we can predict counterfactual expansions of the bank branch network under policies focused on opening rural bank branches, or in the absence of the 1997 financial crisis.

Oligopoly behaviour by domestic firms faced with foreign competition in a small open economy is examined in the context of a market for differentiated products. This paper concentrates on the responsiveness of import flows to import price in the context of trade with imperfect competition. The empirical work analyses the behaviour over time of the interaction between domestic industry prices and domestic costs as well as foreign competitors' prices. A structural model is employed for estimation purposes with consumer demand derived from a CES (constant elasticity of substitution) utility function of domestic and foreign composites of goods. Domestic firms are assumed to face Leontief production functions and maximise profit independently subject to their conjectures about the reactions of rivals. Firm behaviour is modelled using conjectural variations to identify market power, distinguishing two models of oligopoly, namely, Cournot and Bertrand conjectural variations. This leads to the econometric specification of pricing, import and budget share equations consistent with oligopolistic equilibrium. The interrelationship between the budget share equations and the price-cost margin provides encompasses either Cournot or Bertrand conjectural variations. The econometric specification is applied to each of the two digit Australian manufacturing industries using quarterly data covering the period from 1984 to 2000. Results of the industrial behaviour indicate that industries that produce consumer products are generally react to price movements The classification of industry 21 to 24 is more proximate to consumer products as compared to higher industrial numbering. The regression results for industry 25 to 28 suggest quantity reactions. This is in line with the nature of the products produce by these industries, which are heavy industrial manufacturing products. / The elasticity with respect to foreign price is distinguished between the "partial" and the "total" effect. The partial elasticity of import demand ranges from .6205 to 4.9497, while the total elasticity of import demand ranges from .6505 to 19.8132. The elasticity of demand ranges from .0191 for Wood and Paper Product manufacturing to 3.4093 for Food, Beverage and Tobacco manufacturing.

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This dissertation is a theoretical exploration of commonly used policy tools meant to improve market performance. The first chapter examines the use of prizes and grants as instruments for encouraging research and development. The second chapter investigates the welfare impact of price caps in oligopoly markets with endogenous entry. The third chapter studies the relationship between deposit insurance and bank risk taking, when a banker is motivated by reciprocity. The first chapter explores the use of grants and prizes as tools for encouraging research activity and innovation. Grants and prizes are commonly used by public and private research funders, and encourage R&D activity in different ways. Grants encourage innovation by subsidizing research inputs, while prizes reward research output. A common rationale for prizes is moral hazard; if a funder cannot observe all relevant research inputs then prizes create a strong incentive for R&D activity. In this chapter, it is shown that grants are a more efficient means of funding when a researcher's ability is unknown to the funder (adverse selection). When both adverse selection and moral hazard problems exist, a grant may emerge as an optimal funding mechanism, provided the moral hazard problem is relatively weak. In settings where the moral hazard problem is sufficiently strong, a grant emerges as part of an optimal funding mechanism, in conjunction with a prize. These results are useful for understanding different funding mechanisms used by both public and private entities. The second chapter, which is based on joint work with Stan Reynolds, examines the impact of price caps in oligopoly markets with endogenous entry. In the case of deterministic demand, reducing a price cap yields increased total output, consumer welfare, and total welfare. This result falls in line with classic results on price caps in monopoly markets, and with results for oligopoly markets with a fixed number of firms. These comparative static results for price caps need not hold when demand is stochastic and the number of firms is fixed, but recent results in the literature show that a welfare improving price cap does exist. We show that a welfare-improving cap need not exist in the case where demand is stochastic and entry is endogenous. In addition, we provide restrictions on the demand function such that a welfare-improving price cap exists under endogenous entry and stochastic demand. The third chapter, which is based on a joint project with Martin Dufwenberg, investigates the relationship between deposit insurance, risk taking, and insolvency. Empirical evidence suggests that the introduction of deposit insurance increases risk taking by banks and results in a greater chance of insolvency. The common rationale for this connection is that deposit insurance decreases the incentive for customers to monitor their banks, and invites excessive risk taking. In this chapter, it is argued that this classic explanation is somewhat puzzling. If customers can monitor their bank's behavior, certainly the insurance provider (FDIC) has this same ability. If this is the case, appropriate mechanisms could limit the moral hazard problem. We put forth an alternative explanation, and demonstrate that deposit insurance invites excessive risk taking when a banker is motivated by reciprocity.

Darbo objektas – Lietuvos pieno bendrovių pelningumas. Darbo tikslas – įvertinti Lietuvos pieno bendrovių pelningumą lemiančius veiksnius. Darbo uždaviniai: • išanalizuoti teorinius oligopolinės rinkos veikimo ypatumus; • išnagrinėti teorinius pieno sektoriaus rinkos ypatumus; • nustatyti Lietuvos pieno bendrovių grynojo pardavimo pelningumo pokyčius ir įvertinti jį lėmusius veiksnius; • įvertinti Lietuvos pieno bendrovių grynojo pardavimo pelningumo didėjimo galimybes. Tyrimo metodai: literatūros analizė, statistinių duomenų palyginamoji analizė, grafinis vaizdavimas, regresinė analizė. Tyrimo rezultatai: • pirmoje darbo dalyje išnagrinėti oligopolinės rinkos ypatumai; • antroje dalyje nustatytas pieno perdirbimo įmonių veikimo modelis ir išanalizuoti grynojo pardavimo pelningumo kitimą lemiantys veiksniai; • trečioje darbo dalyje įvertintos pieno bendrovių grynojo pardavimo pelningumo perspektyvos iki 2015 m. / Research object – Profitability of Lithuanian milk products manufacturers Research aim – to evaluate the factors of profitability of Lithuanian milk products manufacturers. Objectives: • to consider the peculiarities of the market milk; • to determine and evaluate the lead factors of the profitability of Lithuanian milk products manufacturers ; • to recommend the opportunities for improvement of profitability of Lithuanian milk products manufacturers . Research methods: analysis of literature, statistical and comparatative data analysis, graphical representation, regression analysis. Research results: • in the first section of the paper analysis of oligopolistic market structure is provided. Author analysis the features of Bertrand, Stackelberg, Cournot and other oligopolistic models. • In the second section author designed a model of dairy products market structure in Lithuania and based on the model the factors of profitability of dairy products companies ar analysed. • Third section forecasts the perspective of profitability of dairy products companies until 2015.

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Online streaming has revolutionized the way that people consume films and television. This study will examine how Netflix and Hulu have disrupted the North American distribution oligopoly and asses whether their low subscription prices are adversely affecting major cable companies who dominate the distribution sphere. A review of existing literature on the topic will explore the influence of the Internet on the entertainment distribution oligopoly as well as consumer trends and behavior favoring Netflix and Hulu. Additionally, data from 2007 to 2014 will be used to analyze variables that indicate a correlation between Netflix’s and Hulu’s growth and Time Warner Cable’s decreasing revenue.

Even though empirical studies show that political institutions affect various economic policies, standard economic models do not evaluate the effects of government ideology on the performance of state firms. I argue that state-owned enterprises (SOEs) are more efficient under center-right governments, while state firms under center-left cabinets show weaker performance. A modified Stackelberg oligopoly competition model that analyzes the proposed connection is developed. I, then, test implications from the model empirically using the case of Lithuania.

O principal índice usado para medir concentrações horizontais é o Hirschmann-Herfindahl Index (HHI). Este índice tornou-se popular nos últimos anos devido ao seu apelo teórico e a sua simplicidade computacional, entretanto, apesar desta conveniência, o HHI é inaplicável na análise de mercados em que os compradores possuem poder de mercado. Isso ocorre porque o modelo de Cournot supõe que apenas os vendedores podem influenciar os preços. O erro causado pela aplicação inadequada do HHI é ainda maior quando o mercado considerado apresenta firmas verticalmente integradas. Diante disso, o objetivo deste trabalho é aplicar o MHI, medida de concentração sugerida por Hendricks e Mcafee (2007), na análise da aquisição da Agip pela BR, com vistas a identificar os impactos da operação sobre a concorrência, comparando os resultados com a análise da SEAE e a decisão do CADE. O MHI é capaz de captar a mudança de incentivos de todas as firmas do mercado estudado após o Ato de Concentração, e permite que o efeito líquido da integração seja medido através das variações das margens preço/custo das firmas da indústria. / The main index that is used to measure horizontal concentrations is the Hirschmann-Herfindahl Index (HHI). This index became popular in the last years due to its theoretical appeal and its computational simplicity. However, despite this convenience, the HHI is inapplicable in the analysis of markets where the purchasers have market power. This happens because the Cournot model assumes that only the sellers can influence the prices. The error caused by inadequate application of HHI is even bigger when the considerate market shows vertically integrated firms. In front of this, the objective of this work is apply the MHI, the concentration measure suggested by Hendricks e McAfee (2007), in the analysis of Agip acquisition by BR, with the purpose of identify the operation impacts in the competition, comparing the results with the SEAE analysis and the CADE decision. MHI is capable of catch the incentive change in all firms of the analyzed market after the Concentration Act, and allows that the operations net effect is measured through the price-cost margin variation.