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.common segment is mid-size vehicles (25%); light trucks (SUV, pickup-truck and van) have a 42% share. Durability is measured by the negative of problem-per- vehicle from Vehicle Dependability Study of JDPA for model-years 2000-2003. ... An engine replacement could be more expensive than fixing the brake, thus should imply a lower durability measure26. ... 27 Electrical troubles: power accessories, wiring, wiper motor, radio and sound system, switches, horn, etc. misspecify theanbsp;...

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

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