The purpose of this study is to analyze the effect of CBI-reforms on inflation in different parts of the world from a theoretical and empirical perspective. Compared to previous studies, this study focuses on whether CBI-reforms have different effects on reducing inflation in different parts of the world. The study is based on a 132 country data-set from 1980 to 2005 compiled by Daunfeldt et al. (2008). The result indicates that the reduction in inflation due to the CBI-reforms varies between 2.2 and 12.32 percentage points in Asia, Europe, South America and Oceania, supporting the claim that implementing CBI-reforms can be successful in reducing inflation in most of the parts of the world.

In this dissertation I focus on two considerations that influence the product strategy of a firm. The first is consumers’ choice and its influence on a firm’s product offering, and the second is the interaction between durable products and their contingent consumables. First, I study the assortment planning problem for a firm; I illustrate the complexity of solving this product selection problem, present simple solutions for some commonly used choice models, and develop heuristics for other practically motivated models. Second, I study the incentives of a durable goods monopolist when she can lock-in consumers through a contingent consumable. Adopting a lock-in strategy has two interesting effects on the incentives of a durable goods manufacturer. On one hand, by locking-in consumers to its consumable, a durable goods monopolist can curb its temptation to reduce durable prices over time, thereby mitigating the classic time inconsistency problem. On the other hand, lock-in will create a hold-up issue and adversely affect consumers’ expectations of future prices for the consumable. My research demonstrates the trade-off between time inconsistency and hold-up, and derives insights about the conditions under which a lock-in strategy can be effective. I further analyze the trade-off between time inconsistency and hold-up associated with lock-in in the presence of consumable stock-piling. My findings indicate in the presence of consumer stock-piling, lock-in has an effect similar to that of competition in the consumables market: they help to dampen the hold-up problem that arises from lock-in and at the same time increase the manufacturer’s incentive to reduce durable prices over time. / text

This thesis is divided into two main parts. The first provides a novel analysis of dynamic optimal taxation under the assumption that individuals in an economy have ‘hidden’ idiosyncratic productivity levels. Specifically, it shows how to derive a complete set of optimality conditions characterising the solution to a problem of this kind. The method relies on constructing perturbations to the consumption-output allocations of agents in a manner that preserves all relevant incentive compatibility restrictions. We are able to use it to generalise the ‘inverse Euler condition’ to cases in which preferences are non-separable between consumption and labour supply, and to prove a number of novel results about optimal income and savings tax wedges. The second main part investigates a more general problem. When policymakers are constrained in their present choices by expectations of future outcomes a well-known time-inconsistency problem hinders optimal decision-making: the preferences of policymakers who exist at different points in time are not in agreement with one another, because of differences in the constraints faced by each. We present a new approach to determining policy in this setting, based on asking: What policy would be chosen by a decisionmaker who did not know the time period in which their choice was to be implemented? This is akin to designing institutions from behind a Rawlsian ‘veil of ignorance’. The theory is used to obtain qualitative policy prescriptions across a number of environments; these policies have several appealing properties that we outline.

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<p>This thesis consists of three self-contained essays. The first two essays address the consumption of culture and are closely related in terms of the theoretical framework used. The third essay is a separate analysis of international trade and competition.</p><p>The studies of culture are motivated by the special treatment of culture consumption in most modern societies: there are usually large, government-provided subsidies, the aim of which is to stimulate both the production and the consumption of culture. The purpose of the present work is to explore reasons for this special treatment. Using a stylized theoretical framework, the essays contrast culture with another, generic, good or activity. Culture is thus regarded as an "experience good": previous consumption of the good enhances the current appreciation of the good. The generic good is one where experience is assumed not to be at all relevant for the appreciation of the good. For experience goods, decisions made today will influence future utility and future choices. This makes the intertemporal preferences essential. If, in particular, consumers have time-inconsistent preferences of the type that can be characterized as a present-bias---modeled with "multiple selves" using quasi-geometric discounting---as opposed to standard, time-consistent preferences, there will be a case for government subsidies. The first essay explores this possibility in detail in a framework where experience is mainly of importance in the short run. The second essay then studies cases where experience is more potent and can cause persistent diversity in culture consumption across individuals.</p><p>"Culture and Control: Should There Be Large Subsidies to Culture?" studies the circumstances under which public support for culture is warranted. A policy example is designed to illustrate important aspects of public support systems currently in place, and is calibrated to Swedish data. The essay concludes that, given present-biased agents with self-control problems, public support of culture can work as a commitment device and improve long-run welfare. Furthermore, it is demonstrated that welfare-maximizing subsidies to culture can be substantial if the present-bias is profound and the taste-cultivation property of culture consumption is pronounced.</p><p>"Origins of the Diversity of Culture Consumption" analyzes the diversity of culture consumption among individuals. If the culture good and the generic good are sufficiently close substitutes in a static sense, very large and persistent differences in the consumption of highbrow culture across consumers can be explained by differences in initial experience levels alone. Moreover, slight differences in preferences and time endowments can cause significant diversity between individuals, both in the long- and short-run levels of culture consumption. In addition, if consumers have time-inconsistent preferences, further diversity can be rationalized. If there is a present-bias, there may also be Pareto-ranked multiple equilibria with "optimism" and "pessimism": high (low) culture consumption of the current self is rationalized, based on the belief that future culture consumption will be high (low).</p><p>"Has international competition increased? Estimates of residual demand elasticities in export markets" studies the impact of the last decades of intense economic integration on the competitive conduct of Swedish export industries. The functional relationship between the inverted residual demand elasticity and the Lerner index is used to estimate markups in eight industries. The econometric evidence suggests a deviation from competitive behavior in all industries. Moreover, the results demonstrate a trend of decreasing market power.</p>

This thesis consists of three self-contained essays. The first two essays address the consumption of culture and are closely related in terms of the theoretical framework used. The third essay is a separate analysis of international trade and competition. The studies of culture are motivated by the special treatment of culture consumption in most modern societies: there are usually large, government-provided subsidies, the aim of which is to stimulate both the production and the consumption of culture. The purpose of the present work is to explore reasons for this special treatment. Using a stylized theoretical framework, the essays contrast culture with another, generic, good or activity. Culture is thus regarded as an "experience good": previous consumption of the good enhances the current appreciation of the good. The generic good is one where experience is assumed not to be at all relevant for the appreciation of the good. For experience goods, decisions made today will influence future utility and future choices. This makes the intertemporal preferences essential. If, in particular, consumers have time-inconsistent preferences of the type that can be characterized as a present-bias---modeled with "multiple selves" using quasi-geometric discounting---as opposed to standard, time-consistent preferences, there will be a case for government subsidies. The first essay explores this possibility in detail in a framework where experience is mainly of importance in the short run. The second essay then studies cases where experience is more potent and can cause persistent diversity in culture consumption across individuals. "Culture and Control: Should There Be Large Subsidies to Culture?" studies the circumstances under which public support for culture is warranted. A policy example is designed to illustrate important aspects of public support systems currently in place, and is calibrated to Swedish data. The essay concludes that, given present-biased agents with self-control problems, public support of culture can work as a commitment device and improve long-run welfare. Furthermore, it is demonstrated that welfare-maximizing subsidies to culture can be substantial if the present-bias is profound and the taste-cultivation property of culture consumption is pronounced. "Origins of the Diversity of Culture Consumption" analyzes the diversity of culture consumption among individuals. If the culture good and the generic good are sufficiently close substitutes in a static sense, very large and persistent differences in the consumption of highbrow culture across consumers can be explained by differences in initial experience levels alone. Moreover, slight differences in preferences and time endowments can cause significant diversity between individuals, both in the long- and short-run levels of culture consumption. In addition, if consumers have time-inconsistent preferences, further diversity can be rationalized. If there is a present-bias, there may also be Pareto-ranked multiple equilibria with "optimism" and "pessimism": high (low) culture consumption of the current self is rationalized, based on the belief that future culture consumption will be high (low). "Has international competition increased? Estimates of residual demand elasticities in export markets" studies the impact of the last decades of intense economic integration on the competitive conduct of Swedish export industries. The functional relationship between the inverted residual demand elasticity and the Lerner index is used to estimate markups in eight industries. The econometric evidence suggests a deviation from competitive behavior in all industries. Moreover, the results demonstrate a trend of decreasing market power.

This dissertation consists of three empirical essays on distortions in labor market outcomes in developing countries. Chapter 1 tests for downward nominal wage rigidity in markets for casual daily agricultural labor. It examines responses to rainfall shocks in 500 Indian districts from 1956-2008. First, nominal wages rise in response to positive shocks but do not fall during droughts. Second, after transitory positive shocks have dissipated, nominal wages do not fall back down. Third, inflation moderates these effects. Fourth, rigidities lower employment: landless laborers experience a 6% reduction in employment in the year after positive shocks. Fifth, consistent with separation failures, rationing leads to increased labor supply to small farms. New survey evidence suggests that agricultural workers and employers view nominal wage cuts as unfair and believe that they reduce effort. Chapter 2 (with Michael Kremer and Sendhil Mullainathan) describes the results of a field experiment that tests for self-control problems in labor supply. First, we find that workers will choose dominated contracts—which pay less for every output level but have a steeper slope—to motivate themselves. Second, effort increases significantly as workers’ (randomly assigned) payday gets closer. Third, the demand for dominated contracts (and their benefits) is concentrated amongst those with the highest payday effects. Finally, as workers gain experience, they appear to learn about their self control problems: the correlation between the payday effect and the demand for the dominated contract grows with experience. These results together suggest that self-control, in this context at least, meaningfully alters the firm’s contracting problem. Chapter 3 empirically examines the impact of multiple market failures on allocative efficiency in farm production in poor countries. In years when labor rationing is more likely in villages (due to wage rigidity), there is a 63% increase in sharecropped and leased land by small farmers. This is consistent with the prediction that distortions from a failure in one market can be reduced by reallocating other factors of production. In areas with worse credit access, there is less land adjustment in response to labor rationing. These results provide evidence for separation failures resulting from multiple missing markets.

Decisions made by individuals planning for retirement may be myopic. One way of capturing this myopia is with quasi-hyperbolic discounting. It is well known that such preferences may explain why individuals fail to provide an adequate retirement income for themselves. In this thesis, the quasi-hyperbolic discounting model is applied to a number of other decisions and outcomes related to planning for retirement. There are three main focuses. Firstly, the thesis considers a model where individuals are quasi-hyperbolic discounters over both retirement and saving, and extends the results of Diamond and Köszegi (2003). It argues that mechanisms designed to overcome myopic saving decisions may lead to unplanned early retirement. This may depend on the form of income in retirement -- regular income options such as annuities offer commitment over overconsuming early in retirement, which makes early retirement less desirable to myopic retirees. Secondly, it tests these predictions using a new laboratory experiment. Over a two-month period, participants were asked to attend weekly sessions, and could leave the experiment (or "retire") in any week of their choosing. Part of their payment for attending these sessions was put aside and paid only after they had left. The results indicated that more impulsive individuals left the experiment earlier, both overall and relative to plans made in the first week of the experiment. Finally, this thesis presents a model of rising wages as a forced saving mechanism. Assuming individuals face some borrowing constraints, deferred wages implicitly place some earnings aside until much closer to retirement, when quasi-hyperbolic discounters save a greater fraction of their income, increasing total retirement wealth. It also shows that demand for rising wages should disappear for people with access to more direct saving commitment mechanisms, although when these schemes offer less commitment (due to early withdrawal or early retirement options), a combination of both mechanisms is preferred.

Planos de previdência que dependem de uma postura ativa dos indivíduos para solicitar a adesão acabam tendo uma baixa participação (Benartzi & Thaler, 2007). Por outro lado, resultados mostram que os indivíduos decidem poupar a partir de determinadas \"regras de bolso\", tais como a escolha de um percentual máximo de contribuição que receba uma contrapartida do empregador (se a percentagem máxima que receberá contrapartida do patrocinador de um plano for 8%, então o indivíduo decidirá contribuir com esta percentagem). Assim, estratégias podem ser inseridas nos planos de aposentadoria, de forma que determinados comportamentos sejam \"incentivados\" e outros sejam \"coibidos\", fundamentalmente, em situações manifestas de inconsistência temporal por parte dos indivíduos. Esta pesquisa objetivou identificar, a partir de evidências empíricas, quais arranjos de planos previdenciários do tipo \'contribuição definida\' minimizam o efeito da miopia intertemporal sobre as decisões de poupança para a aposentadoria. Os fundamentos teóricos que nortearam a presente tese foram a Racionalidade Limitada, proposta por Simon (1979), a Teoria dos Prospectos, e as hipóteses do ciclo de vida comportamental (Behavioral Life-Cicle hypothesis), desenvolvidas por Benartzi e Thaler (2007). Utilizou-se um levantamento para identificar as características demográficas dos participantes e, paralelamente, um experimento com base em cenários para identificar as escolhas relacionadas aos planos de previdência complementar do tipo \'contribuição definida\'. O levantamento e o experimento foram formulados com o auxílio da plataforma online Questionpro© e disponibilizados por meio da internet aos participantes. Foram definidos cenários para o grupo de controle (sem manipulação de variáveis) e para dois grupos experimentais (com manipulação de variáveis), para identificar de que forma o desenho dos planos de previdência afeta as decisões de alocação de recursos a eles, e de que forma tais decisões se relacionam com as variáveis demográficas dos segurados. Os testes de hipóteses foram realizados por meio do teste não paramétrico de Wilcoxon para diferença de médias, e por meio da estimação de regressão linear por mínimos quadrados ordinários. Os achados sugerem que os respondentes parecem ter adotado um comportamento mais impaciente, quando o intervalo é deslocado para o futuro, do que quando se compara uma recompensa imediata e uma recompensa tardia em um mesmo intervalo de espera, contrariando a literatura sobre desconto hiperbólico, inconsistência temporal e comportamento impaciente. No que se refere ao efeito dos arranjos institucionais sobre as decisões de poupança para a aposentadoria, observou-se que o desenho deum plano de previdência em que haja inscrição automática compulsória, com a presença de um plano livre de risco, faz com que haja uma maior permanência dos indivíduos neste tipo de plano. Este resultado, aliado às estatísticas descritivas que apontam uma maior aposentadoria nos planos com inscrição automática compulsória e contrapartida do patrocinador (experimentador), em comparação com o plano sem tais características, nos leva a afirmar que tais desenhos permitem uma maior poupança para a aposentadoria por parte dos segurados. Portanto, a inserção de desenhos desta natureza em eventuais políticas públicas pode servir de \"empurrão\" para que as pessoas tomem decisões que vão de encontro à inconsistência temporal. / Pension plans that rely on an active attitude of individuals to apply for membership end up having a low participation (Benartzi & Thaler, 2007). On the other hand, there are findings that individuals decide to save using certain \"rules of thumb\", such as the choice of a maximum contribution percentage receiving a counterpart of the employer (if the maximum percentage that will receive compensation from the sponsor of a plan is 8%, then the individual will decide to contribute to this figure). Thus, strategies can be incorporated into retirement plans in order to contribute to certain behaviors are \"encouraged\" and others are \"restrained\" fundamentally manifest in situations of time inconsistency by individuals. This research aimed to identify, from empirical evidence, which arrangements of pension plans, type defined contribution, minimize the effect of intertemporal myopia on saving decisions for retirement. The theoretical foundations that guided this thesis were Bounded Rationality, proposed by Simon (1979), the Prospect Theory and Behavioral Life-Cicle hypothesis, developed by Benartzi and Thaler (2007). We used a survey to identify the demographic characteristics of the participants and, in parallel, an experiment based on scenarios to identify the choices related to the pension plans, type defined contribution. The survey and the experiment were formulated with the help of the online platform QuestionPro© and made available through the internet to participants. Scenarios were defined for the control group (without manipulation of variables) and two experimental groups (with manipulation of variables) to identify how the design of pension plans affect the resource allocation decisions to plans and how they relate to the demographic variables of the insured. Hypothesis tests were performed using the nonparametric Wilcoxon test for difference of means and through linear regression estimation by OLS. The findings suggest that respondents seem to have adopted a more impatient behavior when the range is shifted to the future than when comparing immediate reward and a delayed reward in a equivalent delay interval, contrary to the literature on hyperbolic discount, time inconsistency and impatient behavior. With regard to the effect of institutional arrangements on savings decisions for retirement it is noted that the pension plan design where there is compulsory automatic enrollment with the presence of a risk-free plan may improve permanence of individuals this type of plan. This result, combined with descriptive statistics that show a higher retirement plans with mandatory automatic enrollment and return the sponsor (experimenter), as compared to the plan without such features, allow us to state that such designs allow greater savings for retirement. Therefore, the inclusion of this type of design in public policy can serve as a \"nudge\" for people to make decisions that go against the time inconsistency.

Paper [I] theoretically analyzes how the level and uncertainty of future prospects affect incentives to abstain from sexual risk taking in the presence of HIV. The results suggest that, for individuals with limited access to HIV treatment, uncertainty of future health may be an important factor driving unsafe sex practices and support the empirical finding of a weak link between sexual behavior, HIV prevalence, and HIV knowledge in poor countries; therefore suggesting that AIDS policy needs to be calibrated in order to fit within different social contexts. Paper [II] empirically tests the link between uncertainty of future prospects and sexual risk taking in a group of young adults in Cape Town, South Africa. The findings indicate that expected income and health and future uncertainty are significant determinants of current patterns of sexual risk taking. However, the empirical results only provide limited support to a link between expected health and sexual risk taking. Paper [III] theoretically analyzes effects of affect and defensive denial on incentives to engage in sexual risk taking related to HIV. The results of the theoretical analysis suggest that the effect of rationalization of personal risk depends on the risk of being HIV positive. Although rationalization causes excessive risk taking behavior for individuals with a relatively low lifetime risk, it may prevent fatalism among individuals whose lifetime risk of HIV is perceived as overwhelming. Paper [IV] theoretically analyzes the role of identity conflict for the evolution of female labor supply over time. The results suggest the fear of becoming an outsider in society may have prevented a complete transition of women from housewives to breadwinners. In addition, our analysis shows that not recognizing that the weights attached to different social identities are endogenous may imply that the long-run effects on labor supply of a higher wage may be underestimated.