The first chapter of this dissertation develops a two-stage inference method for structural parameters in the linear instrumental variables model. In the first stage, a new statistic is used to detect whether the correlation between the structural error and the reduced form error is small. In the second stage, a...
We argue that a country’s level of wealth inequality can be viewed as a reflection of the quality of its housing rental market. Using the ECB’s Household Finance and Consump- tion Survey (HFCS), we document that the aggregate homeownership rate and various measures of wealth inequality are negatively correlated across...
This dissertations consists of three chapters. The first chapter is on the topic of environmental economics and studies the question of the effects of air pollution on students’ school absences, finding significant and positive effects for air pollution, and PM10 in particular, on school absences. The second chapter is on...
Both chapters of this dissertation relate to the aggregate value of corporations in an economy. In particular, they relate to the ratio of the aggregate total market value of corporations over the replacement cost of their recorded capital. The first chapter introduces a model that can explain why this ratio...
This dissertation comprises three essays on industrial organization. In Chapter 1 I study the productivity effects of corporate diversification, where productivity is understood as a measure of sales per input at the productive unit level, and diversified firms are defined as firms that operate in different industries. I develop and...
The patent system seeks to strike the ideal balance between competition and the rate of innovation – not to maximize innovation unconditionally. Clearly there must be limits on the manner and degree to which patents are used to diminish competition. A critical complication, however, is that this boundary is often...
Should the government subsidize entry to promote competition? In theory, free entry does not guarantee the socially optimum number of entrants. In differentiated product markets, free entry can result either in excessive or insufficient entry. Quantifying this inefficiency and identifying the optimal subsidy level require an empirical framework that combines...
In this dissertation we analyze, using standard formal imperfect competition models from the literature, two central public policy issues in the deregulated wholesale electricity markets. The first issue is the regulatory rules around generator ownership of transmission companies or transmission rights in general. The second issue we look into is...
Social networks play an important role in the labor market. Various surveys document that 30-60% of jobs are found through friends or relatives. To better understand how networks operate in the labor market, I examine how networks that were formed involuntarily as a result of the American Civil War and...
I study several aspects of a game-theoretic model of persuasion. A speaker attempts to persuade a listener to take an action which is highly ranked by the speaker. The listener knows the speaker's preference but is uncertain about what the speaker can say. The listener can commit to a persuasion...
This thesis comprises three essays addressing theory and evidence on the household response to tax-favored saving incentive schemes, with a particular emphasis on household risk taking. The US tax code and related regulatory institutions offer a variety of incentives to encourage US households to save and participate in risky investment...
The ready-mix concrete industry is a fascinating laboratory for the study of industry dynamics. Concrete plants produce a single homogeneous product with technology and equipment that has changed little over the last 50 years. Building a plant entails substantial sunk costs since the machinery used to produce ready-mix cannot easily...
This dissertation analyzes the decision process of firms along two dimensions which are central to the field of macroeconomics. First, we study the pricing decision of the firm in a framework where customer base matters. Surveys of managers show that the main reason why firms keep prices stable is that...
This study investigates the causes and welfare consequences of unravelling in two-sided matching markets. "Unravelling" arises when agents contract with one another at an early stage, before much of the relevant information is available. Such early matches may lead to ex-post inefficiencies and are perceived as socially harmful. This study...
This dissertation develops dynamic models to examine markets with product differentiation where both firm conduct and consumer behavior is jointly influenced by switching costs, network effects and technological innovation. In Chapter 1 I propose a structural model of competition where firms set prices, introduce new products and scrap obsolete models....
This dissertation explores price differences observed in the market. While some differences are necessitated by market conditions, the others are strategic. I illustrate the former in a study of electricity spot markets in Italy and the latter for the video rental industry.
The first project examines the welfare gains from...
This collection of essays on horizontal merger enforcement and dynamic contract breach addresses the question of what role, if any, should government play in enforcing the contracts of private parties? The government's appropriate role in these various settings depends, among other things, on the nature of the competition between private...
In the first chapter of my dissertation, I study the effects of an exogenous increase in government spending in models incorporating price and wage nominal rigidities. I find that the effects of price stickiness on the output multiplier depend crucially on the behavior of the monetary authority. If the monetary...
The three empirical analyses in this dissertation study the effects of workers' compensation benefits on individual behavior and household consumption as well as the impacts of workplace injuries and illnesses on economic outcomes for affected workers.
In Chapter 2, I study incentive effects of state workers' compensation programs, exploiting substantial...
Chapter one investigates the impact of agents' expectations about future fundamental economic disturbances (news) on macroeconomic dynamics. Several intuitive tests provide insight into the information content of the yield curve and its' ability to identify these 'news' disturbances. Bayesian estimation of a dynamic stochastic general equilibrium (DSGE) model using conventional...
This dissertation analyzes how individuals choose college majors. The choice of college major is treated as one made under uncertainty. Understanding any decision under uncertainty requires one to study how expectations and preferences are used to make the choice. However, since observed choices may be consistent with many combinations of...
This dissertation formulates, solves and estimates dynamic stochastic games to answer various questions that arise in Industrial Organization. First chapter is a "theoretic" investigation of learning-by-doing and organizational forgetting that shows them to be distinct economic forces whose interplay gives rise to aggressive pricing behavior, market dominance, and multiple equilibria....
I study the problem of choice between two treatments for a population of observationally identical individuals based on statistical evidence about average treatment effects that does not reveal the best treatment with certainty. I approach the problem from the perspective of statistical decision theory, derive treatment rules that minimize maximum...
Institutions are an important determinant of a society's economic performance. To understand why institutions affect economic activity we have to understand how they affect people's incentives in the economy. The patterns of social interaction and beliefs in a society determine the choice of institution. This dissertation focuses on societies where...
Ethicity, race and gender play an important role in labor markets; labor market outcomes such as hiring and compensation are very different across different social groups. These differentials are partly the result of differences in productivity and preferences and partly the result of discrimination. Chapter two uses an audit study...
This dissertation is composed of three chapters, each contributing to different aspects of the literature of partially identified econometric models.
In the first chapter, I introduce a bootstrap procedure to perform inference in the class of partially identified econometric models defined by finitely many moment equalities and inequalities. I provide...
The goal of this dissertation is to improve our understanding of the driving forces behind short-term movements in important aggregate variables such as exports, imports, the trade balance, output, investment, and employment. The first chapter contrasts the cyclical behavior of the trade balance and trade flows in a group of...
In the first part of the dissertation I study mechanism design under limited communication. Chapter 1 offers a detailed analysis of auctions with simultaneous limited communication. I solve for both welfare and revenue maximizing equilibria. The striking feature of optimal equilibria is that they are asymmetric even when the setup...
This dissertation consists of three essays on the identification analysis of econometric models.
The first essay explores the identification question in semiparametric binary response models when all regressors have discrete support. I suggest a recursive procedure that finds sharp bounds on the parameter of interest and can be applied to...
In the first chapter we analyze profits and efficiency implications of a relation between an upstream duopoly and downstream monopoly in Hotelling linear city model. While exclusive contracts maximize the monopolist's profit, at the same time socially they are inefficient. Linear prices, while more efficient, usually also do not achieve...
I show that the speed of price adjustment to aggregate technology shocks is substantially larger than to monetary policy shocks. In the context of large Bayesian Vector Autoregression models, I establish that aggregate and disaggregate prices adjust very quickly to technology shocks, while they only respond sluggishly to monetary policy...
The expansion of public education at the beginning of the twentieth century had a profound effect on the American economy. This dissertation explores the impact of changing educational institutions on both individuals and communities with a study of Iowa during its introduction of modern grammar schools and high schools during...
This thesis is organized into three essays, each with particular insights involving public policy and family formation:
In the first essay, I address the well-documented correlation between the prestige of the university and the labor market income of its graduates by investigating whether a possible medium for this effect is...
Several semiparametric estimators recently developed in the econometrics literature are based on the rank correlation between the dependent and explanatory variables. Examples include the maximum rank correlation estimator (MRC) of Han (1987), the monotone rank estimator (MR) of Cavanagh and Sherman (1998), the pairwise-difference rank estimators (PDR) of Abrevaya (2003),...
The main theme of this dissertation are departures from standard assumptions in economic theory, specifically, departures from the model of subjective expected utility in decision theory.
Part 1 axiomatizes the robust control criterion of multiplier preferences introduced by Hansen and Sargent (2001). The axiomatization shows that the class of multiplier...
Chapter 1: (Bounds on the Counterfactual Revenue Distributions in Auctions with Reserve Prices) In first-price auctions with interdependent bidder values, the distributions of private signals and values cannot be uniquely recovered from bids in Bayesian Nash equilibria. Non-identification invalidates structural analyses that rely on exact identification of the model primitives....
We first introduce the concept of copulas and advocate its use for multivariate option pricing. We focus on four types of bivariate options: basket, rainbow-max, rainbow-min, and spread options. We derive expressions for these options as a function of the copula. We then construct pricing bounds for these bivariate options...
Game Theory is the branch of applied mathematics that studies the strategic interaction among intelligent agents. So far, standard Game Theory literature has interpreted "intelligent agents" exclusively as "rational agents". This work points out that this interpretation is an important limitation since intelligence consists of more abilities, some of which...
In the first part of the dissertation, I investigate the nature of retail coupons, a popular tool for non-price competition. The widely expressed view that coupons are primarily a tool to allow price discrimination has received mixed empirical supports. I depart from the static framework of the price discrimination theory...
This dissertation analyzes the role of price advertising in the retail grocery setting, first exploring how consumers use price advertising in their shopping location decisions, and then considering ways in which retailers use price advertising to maximize store traffic and profits, given consumer use of information. Chapter 2 provides a...
While it is the ongoing growth in healthcare spending that has been making headlines, improving and maintaining healthcare quality is a critical goal of healthcare policy. In this dissertation I answer three questions relating to healthcare quality: does physician-hospital financial integration improves healthcare quality; how physician-hospital financial integration improves healthcare...
This dissertation looks at the consequences of three different government regulatory policies---the nondistribution constraint (which prohibits managers of nonprofit organizations from distributing profits generated by the nonprofit organization to themselves), the 100/0, 85/15, and 90/10 rules (which restrict the fraction of revenue for-profit colleges and universities can receive from Title...
This dissertation consists of two papers united by a common element: they both study the behavior of heterogeneous agents across the business cycle.
In Chapter 1, I consider: what is the link between the drop in consumer credit during the Great Recession and increased unemployment? I build a heterogeneous household...
The first two chapters of my thesis are related to health economics, and explore how individual decisions affecting health can be impacted by different factors, including by government policy. The third chapter of my thesis (coauthored with Heyu Xiong) focuses on public economics in the Chinese context.
>In the first...
This dissertation studies the forces that drive the allocation of patients to hospitals in the United States. Even though it seems there is some market discipline in the hospital industry, we observe that many patients go to hospitals far from the quality frontier and we still do not have a...
I study how electricity generation firms exert market power, raising price above marginal cost. Typical studies of market power in electricity markets focus on how firms sustain markups in the short-run energy market. I explore other channels electricity generation firms use to strategically maximize profits. First, I analyze strategic investments...
Endogenous growth theory has long recognized innovation as one of the key drivers of growth. Understanding what factors encourage or discourage innovative activities and how, in turn, these affect our communities is therefore crucial to inspire policies that promote inclusive growth. This dissertation tries to broaden our comprehension of the...
I describe a novel panel dataset on the U.S. primary care physician population, as well as the institutions and measurement strategies used to study physician behavior in the marketplace. I document several facts on primary care markets and supplier location decisions, the types of patients physicians accept, the scale of...
This dissertation contains three chapters on two broad topics in labor economics: the determinants of early career outcomes and the impact of an aging population (and related policies). The first chapter investigates how the retirement slowdown among older Americans has affected the labor market prospects of younger Americans in recent...
My dissertation consists of two chapters that empirically study policy-related questions in applied microeconomics by using structural econometric modeling developed in industrial organization. In the first chapter, I study the welfare effects of a cap-and-trade program. I develop an equilibrium framework that incorporates forward-looking behavior and transaction costs. In the...
This dissertation is a collection of three essays that study (dynamic) incentive provision in multi-agent settings with asymmetric information: delegation of projects in organizations, dynamic matching on a platform, and arbitration between partners in a dispute.', "The first chapter studies dynamic delegation of heterogeneous projects to agents with diverse capabilities....
This dissertation consists of three essays in Microeconomic Theory that study the interplay between mechanism and information design, provide insights into the design of efficient dispute resolution mechanisms for partnerships, and analyze the stability of fractional matchings in two-sided markets.', "In the first chapter, we study the optimal disclosure policy...
According to contemporary estimates, the 1933 Soviet famine killed six to eight million people, more than two million of them in Ukraine. This dissertation studies causes and consequences of this famine. ', 'Chapter one evaluates the causes of the 1933 famine offered by historians in Ukrainian context. Three main explanations...
This dissertation studies three topics in labor and public economics. The first chapter examines the local economic consequences of prisons using two complementary approaches. The first uses the openings of 230 prisons during the 1990s across the entire United States, and the second uses a quasi-experimental strategy that compares winning...
We tackle two important theoretical problems in macroeconomics and international economics. First, in macroeconomics, especially monetary economics, the models with a standard Taylor rule have multiple equilibria. This multiplicity is problematic since we do not have a theory to determine a price level. We propose a theory to pin down...
Understanding the role of heterogeneity across agents is crucial in predicting how the macroeconomic outcomes are affected by these differences. This dissertation presents three papers in which I study labor market outcomes of different segments of the population according to their choice of education and how labor market characteristics affect...
Households in emerging markets hold significant amounts of dollar deposits while firms have significant amounts of dollar debt. Motivated by the perceived dangers, policymakers often develop regulations to limit dollarization. In this paper, I draw attention to an important benefit of dollarization, which should be taken into account when crafting...
I study three topics in applied microeconomics. My first chapter concerns the effect of daily school start times on academic achievement in Florida. Exploiting the sharp discontinuity in school start time relative to sunrise, I track children who move between schools on either side of the time zone boundary in...
The fact that informational asymmetries impose a significant barrier in path of smooth functioning of markets has been well known in Economics since the 1970s. Communication and information exchange allow to mitigate these barriers to a certain extent. The existing Economic literature allows to get a good grasp of static...
Regulations often impose quality restrictions on firms, which in turn can influence prices and welfare in a theoretically ambiguous manner. To study such quality restrictions, my coauthor and I examine the Wright Amendment by analyzing its full repeal in 2014 as a natural experiment, and the analysis is documented in...
Conventional methods in industrial organization assume that firms are strategically sophisticated and set prices as best responses to their competitive environment. In the first two chapters of this dissertation, I use a detailed dataset of retail and wholesale prices from the newly legalized cannabis industry in Washington state to show...
This dissertation explores two topics in macroeconomics related to aggregation assumptions and microfoundations. Chapters 1 and 2 focus on the representative agent aggregation assumption in the context of open economies, using both an empirical as well as a theoretical approach. Chapter 3 on the other hand, deals with the microfoundations...
Contest theory is an area of game theory that studies environments in which agents make sunk investments in order to get a prize. These investments could be money, effort, time, etc. Contest theory is used to study a wide range of applications, like political contests, research and development, advertisement campaigns,...
This thesis consists of three papers studying applied microeconomics and economic history. The chapters are broadly organized around two different topics: the political effects of media and the consequences of disruption to human capital. In the first chapter, joint with Susan Ou, we study the role of media in the...
Economic and political processes are heavily intertwined. Political processes put constraints on economic activity while economic development influences the way the political system operates. This interconnection is especially tight in developing countries and transition economies with less secure property rights, less stable political institutions, and more rapid economic changes. In...
This dissertation focuses on two topics: macroeconomic implications of consumer inertia, and sovereign debt. In Chapter 1, I explore the role of consumer inertia---persistence in households' consumption choices---as a driver of the rise in corporate profits and decline in the share of young firms in the US economy during the...
This dissertation contains three empirical studies in economic history and labor economics. The first chapter discusses two sources of historical data on work stoppages in the United States: the Third Annual Report of the Commissioner of Labor (1888) and the Tenth Annual Report of the Commissioner of Labor (1896). It...
In this dissertation, I explore how quasi experiments can be used to estimate the causal impact of financial variables on agents’ behavior. Specifically, I analyze three different events that allow me to shed light on the role that financial markets play in decisions made by households, firms, and the government,...
The first two chapters focus on the topic: how efficiently do markets reallocate capital in booms and busts, and what are the effects of policies designed to smooth out fluctuations? I exploit a novel dataset of contracts and projects in the offshore oil and gas industry to examine the role...
This dissertation is a broad study on individual and firm-level financial conditions and their effects on politics. In the first chapter, I study the effect of economic conditions on political polarization using micro-data on house prices, mortgages, and individual political contributions. I argue that shocks to housing wealth --- the...
The world is an increasingly interdependent place. Regions of economic activity are deeply connected with each other through the movement of goods, labor and ideas. This has deep consequence for both the economist and policymaker: in the evaluation of economic activity, an exogenous shock in any given region does not...
Chapter 1 presents analysis comparing the effectiveness of two mechanisms of regulation enforcement: (1) the frequency of inspections and (2) penalties for violations. Recent policy changes regarding enforcement of mining safety regulations are exploited to quantify the effectiveness of each mechanism. It is concluded that increasing the frequency of inspections...
In this dissertation I study the effects of mortgage leverage policies. These policies have become widely used in recent years, both as a macroprudential tool and to protect consumers, yet their effects are still not well understood. In Chapter 1, I show that mortgage leverage rules implemented under the Dodd-Frank...
This dissertation studies three distinct problems in econometrics. Chapter 1 proposes an adaptive randomization procedure for two-stage randomized controlled trials. The method uses data from a first-wave experiment in order to determine how to stratify in a second wave of the experiment, where the objective is to minimize the variance...
In this dissertation, I cover three different topics in macroeconomics. In Chapter 1, I explore the macroeconomic implications of an increase in business competition and its micro transmission channels. In Chapter 2, I document a rise in savings and cash holdings by non-financial corporations across advanced economies and show that...
This dissertation proposes an oracle efficient estimator in the context of a sparse linear model. Chapter 1 introduces the penalty and the estimator that optimizes a penalized least squares objective. Unlike existing methods, the penalty is differentiable – once, and hence the estimator does not engage in model selection. This...
This dissertation examines three distinct empirical questions in macroeconomics and finance. Chapter 1 studies the reasons why households file for bankruptcy. The debt relief households obtain in bankruptcy provides insurance against wealth losses, but also distorts borrower incentives to repay debt, discouraging lending. Understanding how bankruptcy filings respond to changes...
In the first chapter I introduce the ideas that link selling information to surplus extraction. In my environment the seller may be uncertain about how much the buyer both has already learned before contracting with the seller (belief types) and is able to learn after contracting with the seller (information...
This dissertation explores our understanding of corporate credit ratings. In the first chapter I examine the issue of split ratings. S&P and Moody’s often differ in their initial ratings at bond issuance, producing what is referred to as a split rating. The consensus view in the literature and in practice...
This dissertation examines three empirical questions related to human capital in developing countries. Chapter 1 studies the educational and labor market impacts of the telesecundarias, Mexican secondary schools that use televisions to deliver instruction. In areas where there is an insufficient supply of qualified teachers, delivering instruction through technology may...
This thesis investigates various aspects of productivity. In the first chapter I investigate the role of consumer demand in generating productivity dispersion. In particular, I study how differences in consumer preferences across the household income distribution generate dispersion in markups across the Indian manufacturing sector. I find that this consumer...
In this dissertation I examine issues related to uncertainty and robustness in game theory. In Chapter 1 a strategic setting is analyzed where players face Knightian uncertainty about the strategic choices of their opponents. That is, in contrast to the usual Bayesian framework and in line with experimental evidence, players...
This dissertation is composed by three chapters. Chapter one is about productivity hysterisis in the U.S. after the Great Recession. The United States has been experiencing a slowdown in productivity growth for more than a decade. I exploit geographic variation across U.S. Metropolitan Statistical Areas (MSAs) to investigate the link...
In this dissertation I analyze how population aging and political considerations can affect the conduct of fiscal policy and the management of sovereign debt. In Chapter 1 I focus on the impact of an aging population. In Chapter 2 I consider the effects of political uncertainty. How an aging population...
In Chapter 1 I characterize sharp bounds on treatment effects under data combination with instrumental variables. Data combination in this paper refers to having multiple samples drawn from the same population in which observations cannot be linked across samples. I allow for subsets of the outcome, treatment, instrument and covariates...
In Chapter 1, I investigate whether physical capital anchors the spatial distribution of economic activity and how capital destruction affects local economic activity in the short and the long term. I investigate these questions by examining the 1975 frost that damaged coffee trees in the Brazilian state of Paraná. I...
This dissertation is a wide-range study of the relationships between the three central elements of the production function: technology, capital and its financing, and labor. Chapter 1 analyzes the relationship between labor and recent wave of automation and digitization technologies, showing that while they typically substitute for workers, in several...
This thesis explores questions in labor economics and applied microeconomics, with particular focus on issues that have implications for public policy. The first essay estimates the Frisch elasticity, sometimes known as the wage elasticity of labor supply in response to anticipated wage changes. Despite its importance in macroeconomic and public...
This dissertation presents research on the game theory of political power, both between and within nations. It first revisits a classical distinction between three different types of power or influence: information, rewards and threats. By presenting a binary-action Principal-Agent problem which incorporates the essential ingredients of all three types of...
Digitization has led to dramatic cost reductions and reshaped both what and how products are sold. This dissertation examines the impact of digitization on the behavior of market intermediaries that bring together producers and consumers. Our empirical context is the transition from 35mm film to digital cinema technologies in the...
This dissertation contains three essays. In the first essay, "The Role of Connections in Congressional Lawmaking", I investigate the role of connections in congressional lawmaking by studying how legislators' deaths impact their peers' capacity to sponsor and advance bills in the U.S. House of Representatives. I focus on legislators who...
This thesis contains three chapters studying macroeconomics and trade. The chapters are organized into two topics: inflation expectations and perceptions, and the effect of trade intermediation on economic activity. In the first chapter, I investigate whether households are significantly harmed by inaccurate beliefs about inflation. The chapter analyzes two established...
This dissertation contains three chapters. In Chapter 1, I study the effects of bank leverage ratio restrictions in a general equilibrium model of the macroeconomy where lenders can anticipate bank runs. This framework allows the analysis of the tradeoffs associated with bank capital requirements - while unlimited leverage allows capital...
This dissertation is a collection of three studies on topics in economic history and labor economics, in Italy and the United States. The chapters are ordered chronologically, based on the period of interest. In the first chapter, I investigate the causes and consequences of public spending on primary education in...
When demand is volatile and uncertain, prices often cannot adequately respond to demand shifts because these shifts are not known when prices are set. In this dissertation, I use the hotel industry--- an industry with a high degree of demand uncertainty and capacity constraints, which amplify the cost of setting...
Recognizing the significance of social interactions in shaping human behavior and development, policies and programs often rely on peers and social relationships as mechanisms for inducing positive change. Yet, even in randomized control trials, social spillover can make an effective program appear ineffective, and measuring peer effects poses identification...
This dissertation studies three aspects of health insurance market regulation and design. Chapter 1 (which is joint work with Steve Cicala and Ethan Leiber) studies a regulatory mechanism used to constrain insurer market power. The mechanism targets health insurers' Medical Loss Ratio, which is the share of premiums spent on...
This dissertation addresses questions in the fields of household finance and corporate finance. In Chapter 1, I use a quasi-experiment in Norway to examine how households respond to capital taxation. The introduction of a new wealth assessment methodology in 2010 led to geographic discontinuities in household exposure to wealth taxes,...
I analyze a new mechanism through which changes in aggregate income can result in changes in the labor income distribution. This mechanism arises from heterogeneity in the expenditure elasticity of different sectors and in their employment composition. Once total income increases the mechanism suggests that consumption will be re-allocated towards...