Three Essays in Industrial Organization

Three Essays in Industrial Organization

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In Chapter 1, I study the automakers' durability empirically. A dynamic random coefficient discrete choice model is developed and estimated using micro-level data from Consumer Expenditure Survey. The results indicate while a 10% improvement in durability draws 12.31% more consumers, the overall demand only increases by 9.55% due to the fact that consumers replace their vehicles less often. A welfare experiment of improving durability indicates consumers do not necessarily benefit if the privately optimal durability levels are forced to go up. I also find that cost differences are not significant in explaining the durability discrepancy across brands. In Chapter 2, I use a cross-sectional data set in parking garage industry to examine the effect of competition on price and find that competition drives down prices. I also find the degree of curvature of price schedule decreases with competition, implying a greater proportional drop in low-end prices than in high-end prices. In Chapter 3, I study the regulation of interchange fee in credit card market. I find that if the profit-maximizing interchange fee is reduced by a small amount the network would decrease its investment accordingly. This reduction in investment intensifies the network's underinvestment incentive and makes both consumers and merchants worse off.However, JDPA does not weight the problem symptoms by the corresponding cost and treat all trouble spots equally. ... 26Using the repair cost data from CES, the most expensive repairs are body work/painting, clutch/transmission, andanbsp;...

Title:Three Essays in Industrial Organization
Author:Yijia Wang
Publisher:ProQuest - 2008


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