Date of Award
Spring 2023
Document Type
Dissertation
Degree Name
Doctor of Philosophy (PhD)
Department
Economics
First Advisor
Samuelson, Larry
Abstract
This dissertation studies a range of topics in industrial economics. Chapter 1 provides a sufficient condition under which a general screening problem can be reduced, without a loss for the principal, to one with the single crossing property. The sufficient condition requires the agent's types to be ordered in a way that two marginal rates of substitution are both increasing in the type order. The monotonicity of one marginal rate of substitution allows the optimal mechanism to use only an allocation subset. The monotonicity of the other marginal rate of substitution ensures that the agent’s preferences over the allocation subset satisfy the single crossing property. I apply the result to various economic problems with multi-dimensional allocations: multi-product monopoly, product line design, Bayesian persuasion, and delegation. Chapter 2 studies a moral hazard problem in which the principal can ex ante commit to an information disclosure policy to control the agent's monetary incentives. The outcome depends on the unverifiable state of nature, in addition to the agent's effort choice. I characterize the principal's optimal disclosure policy. The critical aspect of the problem is the relation between the order of the increase in the success probability by working and the order of the rate of the increase, across states. The necessary and sufficient conditions for the optimality of full and no disclosure are derived. I also discuss other intermediate forms of disclosure. Chapter 3, coauthored with Jihong Lee, studies the role of taxation in a model of dynamic monopoly bargaining. By conditioning the marginal tax rate on the volume of trade, the social planner can provide incentives for the seller to abandon sequential screening and clear the market immediately in unique equilibrium and independently of the discount factor. The first-best tax policy can be designed to satisfy budget neutrality, to accommodate a planner with imperfect knowledge of the market demand, and to guarantee the seller's participation in absence of rational expectations. We also explore the role of small, constant transaction tax.
Recommended Citation
Kwak, Changhyun, "Essays in Industrial Economics" (2023). Yale Graduate School of Arts and Sciences Dissertations. 1101.
https://elischolar.library.yale.edu/gsas_dissertations/1101
