Thesis Ph. D.)--Ohio State University, 1987. / Includes vita. Includes bibliographical references (leaves 154-157). Available online via OhioLINK's ETD Center.

Railroads have been subject to federal regulation since 1887. Due to the development of competing modes of transportation and changes in types of products being shipped, regulation began to impede efficiency and viability of firms, leading to partial deregulation of the industry in 1980. Partial deregulation allowed railroads to reduce costs, notably through mergers and line abandonment, which were aggressively pursued following deregulation and led to dramatic efficiency gains. However, concerns remain over increased consolidation, lack of competition in the industry, and the ability of firms to continue to realize efficiency gains. This dissertation investigates more recent developments in the rail industry with an eye towards regulation's effect and role. I begin with a study into the markups of price over marginal cost and elasticities of scale in the rail industry. Scale elasticities provide information on where firms are operating on their average cost curves, and markups provide a more theoretically appealing method of examining pricing behavior than the revenue-to-variable-cost measure currently used by regulators. I extend previously developed methods to identify markups and scales for each firm and in each year. I find prices well in excess of marginal cost, and evidence firms are operating near minimum efficient scale, indicating efficiency gains from deregulation may be fully realized. I then present a study that examines productivity changes in the rail industry and the role of technological change. I extend stochastic frontier frameworks to allow productivity and the state of technology to evolve flexibly through time and vary across firms. I find firms turn towards technological innovation to realize productivity gains when other channels previously offered by deregulation are not available. I finish with a study of allocative errors in the rail industry. I again extend a stochastic frontier model to include differences in production across firms and allow allocative errors to be correlated with competitive pressures. I find that incorporating flexibility into the description of firm production is crucial for obtaining unbiased estimates of allocative errors, overcapitalization is prevalent in the rate-regulated rail industry, and additional competition does not appear to reduce inefficiency. This dissertation includes unpublished co-authored material.

M.Ing. / Engineering is both an art and a science. Although engineering demands a lot in the way of energy, imagination and creativeness, it offers one of the most satisfying careers with a sense of adequacy and balance that may be lacking in many other occupations. To stay marketable, engineers should promote their problem solving, interpersonal, technical, financial, and communication skills. Most of these factors, however, are not necessarily part of an engineer's formal education Motivated employees with the necessary competencies and skills are generally recognized as the key to successful organizations. In order to effectively and efficiently manage technical employees, managers should gain insight into their attitudes by understanding their personality traits and core beliefs, and fostering longterm and well-conceived employee development plans. Because people are unique in their needs, values, and systems of motivation, it is practically impossible to tailor jobs and organizational objectives to individual workers. Management education is often a combination of training and experience. The optimal strategy is often not clear. It is the engineering manager's responsibility, then, to optimize the fit between factors of production and worker motivation in order to maximize the performance and productivity of the manager's department or organization. The literature indicates that turnover and motivation of engineers is the product of complex linkages among role stressors, task characteristics, job involvement, job satisfaction, career satisfaction and organizational commitment, to name but a few factors. A problem with having to deal with motivation is that there are no universal solutions. What motivates one person will not necessarily motivate another. Also, much of a person's motivation comes from within him or herself Although the perception.may exist amongst engineers that society in general has little appreciation for them and their accomplishments, engineers themselves feel positive about themselves and their careers. In general, engineers appear to be more involved, more satisfied with their jobs, and more committed to their orgmizations than the non-technical employee. It remains the responsibility of the engineers themselves to change society's preoccupation with glamorous, high-paying jobs, in order for them to be recognized for their contribution to society's standard of living and general well-being. A case study on young engineers is presented to highlight some of the above mentioned issues.

The chapters in this thesis are each concerned with problems of coordination. The coordination issues examined here each arise in distinct situations and imply the need for a different modeling approach in each case. The first case, Chapter 2, considers gender discrimination in contemporary, competitive labour markets. It is sh9wn there that such discrimination can arise as an outcome of maximizing activities on the part of firms facing the problem of worker motivation in the light of imperfect monitorability. This is shown to lead to firms’ hiring practices (in particular discrimination) depending on the practices of other firms and consequently to labour market equilibria of discrimination and of non discrimination. It is shown that a policy of affirmative action can be useful in moving the labour market away from the discrimination equilibrium. The next chapter, Chapter 3, considers an avenue by which the structure of industries in an economy can affect the development of new technologies through its general equilibrium impact on profits relative to wages. It shows that a monopolistic structure in one industry, by increasing the share of profits in aggregate income, tends to increase the relative profitability of innovative activities elsewhere thereby leading to the creation of further monopoly rents which, in turn, feeds back into incentives for innovation thus causing a self-perpetuating cycle. This leads to the possibility of an economy exhibiting multiple steady states including a “Poverty trap” or situation of zero growth. The conditions under which multiple steady states exist are analyzed and the economy’s behaviour out of the steady state is also characterized. The role of government intervention, in the form of subsidies, direct provision of research and patent protection is also examined. Finally it is shown that the model can also explain the existence of clustering of innovations and consequent sporadic growth. The final substantive chapter, Chapter 4, centres on problems of investment coordination in the context of LDCs. These arise when the fall in the price of one good raises the demand for complementary goods, thereby implying that investment decisions leading to such price falls may not be privately undertaken whereas, when coordinated across sectors, such investments could be profitable. This chapter shows that the existence of multiple equilibria hinges upon the more restrictive Definition of complementarity between goods, namely, the Hicks definition. As a result, gross complementarity between goods (on its own), even though causing horizontal externalities, can not lead to the existence of multiple equilibria. A later section looks at gross complements in the presence of knowledge spillovers and shows, in contrast, that this can lead to multiple equilibria and coordination problems. The chapter also examines the social optimality of coordination in the Hicks complements case, showing that it is not always implied by the multiplicity of equilbria. / Arts, Faculty of / Vancouver School of Economics / Graduate

Thesis advisor: Julie H. Mortimer / My doctoral research focuses on empirical investigations of contracting in intermediate markets and its effects. I am currently pursuing two research projects that together constitute the chapters of this dissertation. The first chapter focuses on contracting between hospitals and insurers and a pricing practice in place in Maryland. In the second chapter, which is joint work with Julie Holland Mortimer and Sylvia Hristakeva, we instead investigate contracting practices in the national television advertising market. Chapter 1) In recent years researchers and policymakers have shown renewed interest in various types of health care reforms in the United States. In "Welfare Effects of Using Hospital Rate Setting as an Alternative to Bargaining" with Ayse Sera Diebel we investigate a potential health care reform. Prices paid by insurers to hospitals are determined by bilateral negotiations in all U.S. states except Maryland, where a unique all-payer rate setting health care regulation sets common prices for all insurers. Theory models of bilateral bargaining are unable to assign welfare effects when contracts are unobserved. We empirically analyze how a Maryland style regulation would affect overall welfare relative to bilateral bargaining, using the New Jersey health care market as an example. Using hospital-, insurer-, and patient-level data from 2010, we estimate a structural model of hospital and insurer demand, and simulate consumer and insurer responses to the new price regime. We find that replacing bargaining with all-payer rate setting increases total surplus in the market. However, not all agents benefit, and the effects depend on how the largest player in our market, Blue Cross Blue Shield (BCBS), sets premiums. If BCBS sets premiums a la Bertrand Nash, consumer surplus decreases, but joint hospital-insurer surplus increases by more. The number of uninsured increases by two percent. Surplus changes are robust to different pricing strategies of BCBS, that account for its non-profit status but, diminish the magnitude of surplus changes. Chapter 2) In "Contracts in the upfront market for national television advertising'' with Sylvia Hristakeva and Julie Holland Mortimer, we investigate unique pricing practices. We focus on advertising and treat it as an input to a firm's production process. The market of national television is of interest because it still commands the majority of advertising in the United States. Yet, firms face different costs when accessing the market for national television ads. Industry practices suggest that (legacy) firms with long histories of participation in the market benefit from favorable prices to reach the same audiences. We confirm empirically whether there are important differences in firms' costs to advertise nationally. Contracts between advertisers and networks are considered trade secrets, so we combine data on national ad placements and program viewership demographics with average ad prices in each program airing to perform our analysis. We find model-free evidence that firms who have longer relationships with broadcasters face lower prices in those networks. We use a structural model to quantify these price differentials, allowing for differences in firms' payoffs from advertising to different audiences. Preliminary results suggest that legacy firms obtain an 8\% discount relative to non-legacy firms. This discount translates into a $2 million efficiency that would be available to a non-legacy firm if it were to merge with a legacy firm. / Thesis (PhD) — Boston College, 2018. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

Thesis advisor: Michael Grubb / This dissertation addresses questions in the health insurance and industrial organization fields. In the first chapter, I investigate how gender-based pricing bans affect health insurance markets offering long-term contracts. In thesecond chapter, I examine lapsing, and its implications, in a health insurance market offering long-term contracts. In the third chapter, I study the long-term implications of product unavailability in the beer market. Chapter 1: In theory, guaranteed renewable (GR) insurance contracts can efficiently insure against reclassification risk without causing adverse selection on pre-existing conditions. In practice, however, adverse selection can still arise on other dimensions. In 2020, in response to protests demanding gender equality, Chile banned gender-based pricing in its private health insurance market. I investigate how this policy impacts Chile’s health care system, which consists of a low-quality public option and a private market characterized by the use of GR contracts. I find that, if the ban is implemented, prices in the private market would increase as low-cost men switch to the public option and high-cost women enter. Overall, the regulation causes a shift of surplus from men to women. The ban is regressive, as high-income groups benefit more than low-income groups, creating a trade-off between gender-based equity and income-based equity. Subsidies that induce low-cost enrollees to remain in the private market are the most effective mitigation strategy to contain higher premiums. Finally, relative to non-GR contracts, the number of individuals choosing the private market is lower under guaranteed renewability. Chapter 2: Guaranteed renewable (GR) insurance contracts have the potential to efficiently protect individuals against reclassification risk without the negative side effects of price regulation, such as adverse selection. For these contracts to work properly, consumers must pay front-loaded premiums when healthy and stick with their contracts for many years in order to subsidize their future high-risk selves. This paper studies lapsing in the Chilean private health insurance markets, a system characterized by the offering of GR contracts. I find that most policyholders lapse their insurance plans just a few years after signing their contracts. I show that policies and lapse patterns predicted by standard theoretical models of long-term contracts are the opposite of those observed empirically. Finally, premiums increasing over time, and consumers lapsing their contracts because of those price changes, are a key determinant of insurers’ profits. Chapter 3: The marketing literature has investigated the processes potentially leading to brand building and the benefits these brands may enjoy over time. One of those possible benefits is resilience in the face of a reputational challenge or a crisis. This chapter focuses on the long-term implications of product unavailability. We leverage a quasi-natural experiment that exogenously removed the top leading beer brands from retail stores for several weeks. We test whether these prolonged stockouts can erode market shares beyond the current or subsequent purchase occasions and study the potential mechanisms at play. Using panel data of consumer purchases before and after the product shortage, we observe that the top brands only partially recovered their pre-stockout market shares, especially among their most frequent buyers. We identify a sizable portion of consumers who tried small brands for the first time during the stockout period and remained to buy those products persistently. To control for prices, state dependence, and product availability, we estimate a choice model with heterogeneous preferences and find that exposure to stockouts has long-run effects on purchase behavior. We interpret our estimates as evidence that consumers facing a restricted choice set may learn or become aware of competing products with long-lasting consequences on preferences. / Thesis (PhD) — Boston College, 2023. / Submitted to: Boston College. Graduate School of Arts and Sciences. / Discipline: Economics.

This dissertation consists of three chapters covering topics in empirical industrial organization. The first chapter considers how consumers respond to reductions in the net weight of packaged goods. The second chapter documents the use of pricing zones among US grocery retailers. Finally, the third chapter analyzes the market power of Visa credit cards. The first chapter examines how consumers respond to product downsizing where firms increase unit prices by reducing the content of their packaging. I consider whether consumers are inattentive to reductions in package content since they tend to underuse statements of net weight. I build a structural model of consumer preferences that incorporates inattention to changes in net weight and apply it to grocery store scanner data. I apply the model to a downsizing event in the black pepper industry where the industry’s largest firm shrunk five of its products. I show that approximately half of all consumers fail to notice the reductions. With full information, consumers would switch to larger packages that provide greater welfare. In the second chapter, Joseph Simmons and I document the extent of zone pricing among top grocery retailers. Using data from grocery and home improvement retailers, we develop a machine learning algorithm that identifies pricing zones from point of sale data. We apply our method to pricing data from some of the top grocery retailers. We find that these large grocery retailers price their products using a small number of zones. Moreover, the number of zones does not change over a nine-year period, despite significant improvements in information technology during this time. This suggests that an inability to distinguish demand across stores is the primary impediment to greater price discrimination. The third chapter evaluates the market power of Visa credit cards by exploiting an event where the grocery retailer Kroger stopped accepting Visa credit cards at two of its grocery chains. I employ an event study methodology to examine how foot traffic changes at the beginning and end of the ban. I find that foot traffic decreases by six percent at the start of the ban, implying that Visa has substantial market power. Because Kroger offered price discounts and other promotions during this time, my result may represent a lower bound on the true effect. However, the results are sensitive to violations in the identifying assumptions.

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