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.Table 1.8: A Sample of Own- and Cross-Elasticity w.r.t Problem ... 0.122 0.079 0.041 0.202 0.032 0.188 0.218 0.332 0.068 0.215 -22.132 0.077 0.110 Buick Lesabre 0.123 0.079 0.042 0.187 0.032 0.177 0.222 0.339 0.070 -22.615 0.301 0.080anbsp;...
|Title||:||Three Essays in Industrial Organization|
|Publisher||:||ProQuest - 2008|