Thesis (Ph. D.)--University of Texas at Austin, 1988. / Includes bibliographical references (leaves 420-440).

The economic prosperity of a nation is a complex function of many factors, including its culture, geography, history, legal origins, ethnolinguistic fractionalization, resource endowment, leadership and religious homogeneity. However, economic prosperity is most robustly related to the quality of a nation’s institutions under which its resources are put to productive use. Institutions are the humanly devised constraints that structure political, economic and social interactions. Fundamental economic institutions, like property rights and the rule of law, structure the incentives that affect a nation’s productivity. Since at least the early 1990’s, economists have quantified economic institutions and policies by aggregating economic policy variables into economic indexes. Of these indexes, the most popular is the Economic Freedom of the World, which measures the consistency of a nation’s institutions with the principles of economic freedom. After decades of study, we know that economic freedom is positively related to income, gender equality, civil liberty and happiness among other desirable economic outcomes. Despite the benefits of simplifying institutions into a single number, the implicit assumptions required to do so are costly. By summarizing institutional quality as a single quantity, scholars assume that the underlying institutional structure of two economies are identical as long as their summary scores are identical. This assumption is often false, and this research examines the costs of this assumption for modeling economic growth. The common methodology for measuring institutional quality ignores both institutional volatility and institutional imbalance. This research shows that both measures are robustly and negatively related to economic growth rates. Therefore, models that simply a nation’s institutions to a single value at a single period of time are assuming away valuable information that helps explain a nation’s prosperity or lack thereof. In addition to examining the costs of these false assumptions, this research also examines the institutional trends among U.S. states since 1981. Despite declining economic freedom in the United States relative to other nations, state and local governments in the United States are liberalizing in recent decades. This phenomena is driven by increasing labor market freedom among states.

<p>This dissertation explores the implications of endognenizing the times decisions are faced for intertemporal decision-making in a variety of contexts. Chapter 1 considers a standard, expected-utility maximizer whose preferences are inferred using standard protocols that influence the decisions that the agent considers. The treatment shows how these induced decision points," if unaccounted for, can produce illusions of well-known preference anomalies. Capturing the endowment effect, if receiving a good compels the agent to consider the decision to consume it, then the willingness-to-accept (WTA) in exchange for the received good exceeds the willingness-to-pay (WTP) prior to its receipt. If eliciting time-preferences -- i.e. being asked to evaluate an intertemporal tradeoff involving different quantities of the good -- likewise compels the agent to consider the consumption decision, present bias arises in the form of a measured quasi-hyperbolic discount function with present bias factor less than one. While reconciling the preference anomalies with core principles of standard utility theory, the results also suggest that the endowment effect and present bias | generally treated as distinct phenomena | are actually manifestations of an identical decision-purview effect. In fact, the elicited present bias equals WTP/WTA.</p><p>Chapter 2 introduces a framework for bad habits (namely, addiction) based on endogenous decision points -- i.e. the times a recurring decision is faced. Cravings are interruptive decision points that force an individual to consider consumption while inflicting a small opportunity cost. By extinguishing the craving, addictive consumption brings a brief vacation from unwanted decision points. The development of a habit is jointly characterized by a rising frequency and a rising per-decision level of consumption, matching behavioral patterns that standard habit-formation models do not address. Integrating external cues, modeled as random decision points, consumption routines become regimented as addiction develops. Occasional users are most responsive to cues, while addicts are comparatively immune. With peer consumption as a decision point, the group model predicts synchronized consumption, homogeneous self-sorting, and herd behavior | including imitation of a stray peer.</p><p>Chapter 3 complements the endogenous decision points theory of addiction of the previous chapter with a multidisciplinary survey of addiction research, organized and interpreted through the lens of the theory. In particular, I present evidence to support formalizations and results for the three decision point representations: internal cravings, external cues, and peer consumption. This chapter also discusses how the theory may help integrate key addiction concepts from other elds into economic formalism. For instance, I examine the physiological microfoundations of the interval function for cravings, and explain why it can be dierent for two products (e.g. cigarettes and chewing tobacco) that deliver the same product (nicotine). Further, I describe how transitions between abstinence and addiction can be motivated solely in terms of the endogenous interval function." Finally, I propose that the formal notion of cravings as decision points may shed light on three prominent symptoms of</p> / Dissertation

<p> This dissertation contains three essays on proprietary cities. Proprietary cities have three defining feature: (1) a private, for-profit entity (the proprietor) retains land ownership; (2) the city has substantial legal and regulatory autonomy from the host country; and (3) the proprietor has a meaningful role creating and enforcing a new legal and regulatory system. The first essay offers an introduction to the idea of proprietary cities, investigating the incentives facing the proprietor and the policies the proprietor is likely to adopt. The second essay investigates governance in proprietary cities. It examines the literature on monopolies, private dispute resolution, and private police to better understand how proprietary cities might act. The third essay places proprietary cities in an institutional context. It develops an understanding of why such substantial policy changes might be allowed, and how to think about proprietary cities with regard to the new institutional literature.</p>

<p> In this dissertation, I study three problems in market design: the allocation of resources to schools using deferred acceptance algorithms, the demand reduction of employees on centralized labor markets, and the alleviation of traffic congestion. I show how institutional and behavioral considerations specific to each problem can alleviate several practical limitations faced by current solutions. For the case of traffic congestion, I show experimentally that the proposed solution is effective. In Chapter 1, I investigate how school districts could assign resources to schools when it is desirable to provide stable assignments. An assignment is stable if there is no student currently assigned to a school that would prefer to be assigned to a different school that would admit him if it had the resources. Current assignment algorithms assume resources are fixed. I show how simple modifications to these algorithms produce stable allocations of resources and students to schools. In Chapter 2, I show how the negotiation of salaries within centralized labor markets using deferred acceptance algorithms eliminates the incentives of the hiring firms to strategically reduce their demand. It is well-known that it is impossible to eliminate these incentives for the hiring firms in markets without negotiation of salaries. </p><p> Chapter 3 investigates how to achieve an efficient distribution of traffic congestion on a road network. Traffic congestion is the product of an externality: drivers do not consider the cost they impose on other drivers by entering a road. In theory, Pigouvian prices would solve the problem. In practice, however, these prices face two important limitations: i) the information required to calculate these prices is unavailable to policy makers and ii) these prices would effectively be new taxes that would transfer resources from the public to the government. I show how to construct congestion prices that retrieve the required information from the drivers and do not transfer resources to the government. I circumvent the limitations of Pigouvian prices by assuming that individuals make some mistakes when selecting routes and have a tendency towards truth-telling. Both assumptions are very robust observations in experimental economics.</p>

This dissertation consists of three essays studying economic agents making decisions under uncertainty. I introduce and study two non-standard choice models which relax different aspects of the standard model. The first essay models an agent who may be optimistic. Theories of optimism typically hypothesize that optimism is driven by agents changing their beliefs, or view of the world. I hypothesize that agents maintain their view of the world, but form optimistic beliefs by distorting the information used to update beliefs in a motivated way. I behaviorally identify the (possibly distorted) information used to update beliefs and provide a novel behavioral definition of optimism that alters Dynamic Consistency to account for both the distorted information and the optimistic nature of the distortion. The second essay models an agent who may imperfectly understand acts---mappings from states to outcomes. Given an act, I model coarse understanding using partitions of the state space: for each cell of the partition, the agent knows the set of outcomes that she could receive if the true state lies in that cell, but within each cell she is unable to match states with outcomes. A key feature of the model is that the agent may understand different acts using different partitions, which captures the idea that the structure of an act can affect the agent's understanding. This allows us to differentiate limited understanding of acts from coarse contingencies and ambiguity aversion, both related phenomena, using only static choice of acts. Our main results axiomatically characterize this model and uniquely identify the partitions used to understand acts. The third essay applies the coarse understanding model to a standard auction design setting, where bidders may imperfectly understand how the allocation and payments depend on the bid profile. The main result shows that it is optimal for the auctioneer to design the auction so that bidders fully understand their win probability and payment when truthfully revealing their type. This offers another point of contrast with the ambiguity literature, where it is optimal for the auctioneer to design the auction so that each bidder's payoff is independent of other bidders' bids.

by Lau King Por Simon. / Bibliography: leaves 150-155 / Thesis (M.Ph.)--Chinese University of Hong Kong, 1985

Lai Wing-kam. / Thesis (M.S.Sc.)--The Chinese University of Hong Kong. / Bibliography: l. [152]-[155]. / Chapter Chapter 1 --- THE GEO-BACKGROUND OF COMMENCE --- p.1 / Chapter Chapter 2 --- STAGES OF ECONOMIC GROWTH --- p.19 / Chapter Chapter 3 --- THE CHANGING LOCATIONAL PATTERN ON THE CHIEF COMMERCIAL DISTRICTS --- p.54 / Chapter Chapter 4 --- THE COMMERCIAL STRUCTURE OF THE CENTRAL DISTRICT --- p.79 / Chapter Chapter 5 --- THE COMMERCIAL STRUCTURE OF TSIMSHATSUI --- p.100 / Chapter Chapter 6 --- THE COMMERCIAL STRUCTURE OF KWUNTONG --- p.115 / Chapter Chapter 7 --- HAWKERS --- p.126 / Chapter Chapter 8 --- CONCLUSION --- p.143 / BIBLIOGRAPHY --- p.152

Digitized by Kansas Correctional Industries

Thesis (Ph.D.)--Harvard University, 2004. / Adviser: Dani Rodrik. Includes bibliographical references.