Thesis (Ph.D.)--Massachusetts Institute of Technology, Dept. of Economics, 2002. / Includes bibliographical references (p. 150-155). / This thesis includes three essays on the interaction between financial market institutions and market liquidity, and its implications for financial stability. The first essay studies an overlapping generations model of a risky asset market in which some agents face a participation cost. Market participation, by affecting the size of the pool of potential holders of the risky asset, determines the liquidity of the asset market. This essay studies how the frictions that are associated with capital requirements on financial institutions affect their incentives to supply liquidity to the market. The participation decision generates a positive and a negative externality, and the interaction between the two externalities can give rise to multiple equilibria in participation, i.e. to "liquidity cycles". The second essay studies the complementary problem of the optimal design of incentive systems for financial institutions in the context of limited market liquidity. In a contract between a borrower and a lender, financial incentives are provided by requiring the borrower to finance a sufficiently large share of her investment project. In the states of nature in which many projects are liquidated simultaneously, liquidation in private contracts is excessive relative to the efficient (second-best) contract chosen by a planner who internalizes the externality working through the liquidation price. This essay studies whether capital requirements on the borrowers can implement the second best allocation, and if not what kind of policy instruments can implement it. / (cont.) The last essay presents a model of international lending that is built on a basic form of contractual incompleteness: foreign investors cannot commit to provide state-contingent or long-term finance to domestic entrepreneurs. This form of contractual incompleteness implies that there is excessive liquidation of socially viable projects in the competitive equilibrium that emerges in decentralized markets. Institutions that manage to limit liquidation have the potential to improve welfare. / by Roberto Benelli. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2006. / Includes bibliographical references. / This thesis consists of three essays on economic design and coalition formation. The first chapter studies the stability of many-to-one matching, such as matching between students and colleges or interns and hospitals. Complementarities and peer effects are inherent in many such matching situations. The chapter provides the first sufficient condition for stability that may be used to study matching with complementarities and peer effects. The condition offered is shown to be also necessary for stability in some matching problems. The second chapter provides a sufficient condition for the non-emptiness of the core in coalition formation such as the formation of clubs, partnerships, firms, business alliances, and jurisdictions voting on public goods. The condition is formulated for settings in which agents first form coalitions and then each coalition realizes a payoff profile from the set of available alternatives via a mechanism. In particular, there exists a core coalition structure if the payoffs are determined in the Tullock rent-seeking game or Nash bargaining. The core might be empty if the payoffs are determined by the Kalai-Smorodinsky or Shapley bargaining solutions. / (cont.) The chapter also determines the class of linear sharing rules and regular Pareto-optimal mechanisms for which there are core coalition structures. The third chapter studies the multidimensional screening problem of a profit-maximizing monopolistic seller of goods with multiple indivisible attributes. The buyer's utility is buyer's private information and is linear in the probabilities of obtaining the attributes. The chapter solves the seller's problem for an arbitrary number of attributes when there are two types of buyers, adding a new simple example to the few known examples of solved multidimensional screening problems. When there is a continuum of buyer types, the chapter shows that generically the seller wants to sell goods with some of the attributes partly damaged, stochastic, or leased on restrictive terms. The often-studied simple bundling strategies are shown to be generically suboptimal. / by Marek Pycia. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1997. / Includes bibliographical references. / by Vandy Marie Howell. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2011. / Cataloged from PDF version of thesis. / Includes bibliographical references (p. 97-101). / The first chapter examines the interaction of heterogeneous firms in a competitive market in which firms motivate their workers using relational incentive contracts. In the steady-state rational-expectations equilibrium, aggregate TFP is fully characterized by a weighted average of firm-specific sustainable effort levels. Relational contracts amplify exogenous productivity heterogeneity and lead to dispersion in the net marginal revenue product of labor. Improvements in formal contracting disproportionately benefits low-productivity firms, leading to a greater dispersion of the net marginal revenue product of labor in weaker contracting environments. Thus, cross-country differences in contracting institutions can partially explain the observed pattern that misallocation is more pronounced in developing countries. The second chapter explores organizational responses to influence activities-costly activities aimed at persuading a decision maker. Rigid organizational practices that might otherwise seem inefficient can optimally arise. If more complex decisions are more susceptible to influence activities, optimal selection may partially account for the observed correlation between the quality of management practices and firm performance reported in Bloom and Van Reenen (2007). Further, the boundaries of the firm can be shaped by the potential for influence activities, providing a theory of the firm based on ex-post inefficiencies. Finally, boundaries and bureaucratic institutions interact: more concentrated decision-making and bureaucratic institutions are complements. The third chapter (co-authored with Robert Gibbons and Richard Holden) analyzes a rational-expectations model of price formation in an intermediate-good market under uncertainty. There is a continuum of firms, each consisting of a party who can reduce production cost and a party who can discover information about demand. Both parties can make specific investments at private cost, and there is a machine that either party can control. As in incomplete-contracting models, different control structures create different incentives for the parties' investments. As in rational-expectations models, some parties may invest in acquiring information, which is then incorporated into the market-clearing price of the intermediate good by these parties' production decisions. The informativeness of the price mechanism affects the returns to specific investments and hence the optimal control structure for individual firms; meanwhile, the control structure choices by individual firms affect the informativeness of the price mechanism. In equilibrium the informativeness of the price mechanism can induce ex ante homogeneous firms to choose heterogeneous control structures. / by Michael Leslie Powell. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1990. / Includes bibliographical references (leaves 261-270). / by Christopher Allan Vellturo. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1995. / Includes bibliographical references. / by Nicholas S. Souleles. / Ph.D.

Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2014. / Cataloged from PDF version of thesis. / Includes bibliographical references. / This thesis consists of three chapters that cover separate topics in econometrics. The first chapter demonstrate a negative result on the asymptotic sizes of subset Anderson- Rubin tests with weakly identified nuisance parameters and general covariance structure. The result of Guggenberger et al (2012) in case of homoskedasticity is shown to break down when general covariance structure is allowed. I provide a thorough simulation results to show that the break-down of the result can be observed in wide range of parameters that is plausible in empirical applications. The second chapter propose an inference procedure on Quasi-Bayesian estimators accounting for Monte-Carlo numerical errors. Quasi-Bayesian method have been applied to numerous applications to tackle the non-convex shape arises in certain extremum estimations. The method involves drawing finite number of Monte Carlo Markov chains to make inference and thus some degree of numerical error is inevitable. This chapter quantifies the degree of numerical error arising from the finite draws and provides a method to incorporate such errors into the final inference. I show that a sufficient condition for establishing correct numerical standard errors is geometric ergodicity of the MCMC chain. It is also shown that geometric ergodicity is satisfied under Metropolis Hastings chains with quasi-posterior for the whole class of extremum estimators. The third chapter considers fixed effects estimation and inference in nonlinear panel data models with random coefficients and endogenous regressors. The quantities of interest are estimated by cross sectional sample moments of generalized method of moments (GMM) estimators applied separately to the time series of each individual. To deal with the incidental parameter problem introduced by the noise of the within-individual estimators in short panels, we develop bias corrections. These corrections are based on higher-order asymptotic expansions of the GMM estimators and produce improved point and interval estimates in moderately long panels. Under asymptotic sequences where the cross sectional and time series dimensions of the panel pass to infinity at the same rate, the uncorrected estimators have asymptotic biases of the same order as their asymptotic standard deviations. The bias corrections remove the bias without increasing variance. / by Joonhwan Lee. / Ph. D.

Massachusetts Institute of Technology. Dept. of Economics. Thesis. 1969. Ph.D. / Vita. / Bibliography: leaves 193-195. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics and Social Science, 1962. / Vita. / Includes bibliographical references (leaves 754-777). / by Davis Bernard Bobrow. / Ph.D.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2004. / Includes bibliographical references. / This thesis examines the well-being of families under changing labor market conditions, changes in the legal environment and changes in public policy. The first chapter asks how women's fertility decisions are affected by changing labor market conditions. Chapter two examines whether divorce shocks persist into old age, and the final chapter studies how the elderly alter their living arrangements in response to changes in Social Security benefit payments. Chapter one exploits exogenous variation in labor demand for women to measure how total fertility responds to changes in female earnings. The principal finding is that women who are likely to face lower wage offers - those who have completed high school or are high school dropouts - reduce their total fertility when labor market conditions are better. In contrast, women who are likely to face higher wage offers - those who have completed at least some college - increase their total fertility when labor market conditions improve. Chapter two exploits variation in property division laws to examine whether there is a persistent effect of such laws on the well-being of ever-divorced women in retirement. The results suggest that a woman who divorces in a state and year where all pension assets are recognized as marital property has higher per capita household income in retirement than a woman who divorced in a state where pensions were not considered marital property. / The results are consistent with some persistence in the effect of property division laws at divorce, but the effects do not appear to be pervasive enough to have a significant impact on other measures of well-being in retirement, including whether a woman lives independently, whether she or a member of her household owns her home, whether she receives government assistance, and whether she receives pension income. Chapter three examines how elderly individuals change their living arrangements when their social security benefits change. Findings suggest that living arrangements are substantially more elastically demanded by non-married elderly than previous studies, and that reductions in Social Security benefits would significantly alter the living arrangements of the elderly. Most of these effects appear to be concentrated among the less educated elderly. / by Cynthia Diane Perry. / Ph.D.