Date of Award

Spring 1-1-2025

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Samuelson, Larry

Abstract

This doctoral thesis consists of three essays in microeconomic theory, each examining how different types of frictions—political, informational, or contractual— can affect strategic interactions and outcomes in important economic settings such as redistributive negotiations, product markets, and the workplace. The first essay (Chapter 2) investigates a redistributive negotiation where two parties seek to extract resources from a third party. While the third party lacks formal representation at the bargaining table, he can use costly protests to disrupt negotiations. The second essay (Chapter 3) analyzes a product market in which homogeneous-good firms compete for the unitary demand of a rationally inattentive consumer, i.e., a consumer who faces cognitive constraints when assessing market offers. Finally, the third essay (Chapter 4) explores the optimal design of monitoring and compensation schemes to uniquely implement effort in a multi-agent setting where the principal can monitor workers flexibly but is constrained in the number of pay-relevant contingency clauses that can be included in the incentive contract. A unifying theme across all three essays is the role of competition in shaping equilibrium outcomes. In the first two essays, competition allows bargainers or firms to secure commitment power, leading to advantageous strategic behavior. In the third essay, (intra-firm) competition arises endogenously as the optimal robust mechanism for monitoring workers' performance in the presence of contractual frictions.

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