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...
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...
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...
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...
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 investigates how public disclosure of quality information affects the behavior of firms. The first chapter uses a quality disclosure policy, the Nursing Home Quality Initiative (NHQI), to examine how quality "report cards" affect firms' choices of multidimensional product quality. I show that after the introduction of NHQI: (1)...
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...
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...
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...
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...