Essays in Industrial Organization and Political Economy

dc.contributor.authorNandy, Abhinabaen
dc.contributor.committeechairSarangi, Sudiptaen
dc.contributor.committeechairTserenjigmid, Gerelten
dc.contributor.committeememberKovach, Matthewen
dc.contributor.committeememberBose, Niloyen
dc.description.abstractThis dissertation comprises of three problems in the area of Political Economy and Industrial Organization. The first chapter concerns how ideologically-opposite media firms report a particular event to maximize their payoffs from advocating their ideology and strengthen reader trust which increases if the report is proximate to their beliefs. I use these facts to develop a Hotelling's linear city model of competition where the two media firms choose their respective locations which signify the impression they want to impart to its readers. I find partisan media provides accurate information while covering topics favorable to its ideology. However, for unfavourable topics, the media never provides an indifferent report, but either defends its own ideology or delivers a partially accurate report. For unfavourable issues, imparting an indifferent impression rewards a media with lowest equilibrium payoffs. I identify sufficiency conditions where readers give better assessment to news of a media located farther away from their ideology than one which is nearer. Increasing competition by the entry of a third firm does not necessarily alleviate the level of bias in the news economy. The second paper studies the pricing schedule of a monopolist while it sells a non-durable product over two time periods. The consumer's experience with the product is correlated with two possible states — good (bad) experience is more probable under a high (low) state. Given this, I study the monopolist's pricing scheme in the two periods when consumers are wishful — overly optimistic about the high state even after a bad experience. I provide a comparative study of prices in each periods when the monopolist announces prices with and without commitment when consumers are either naive or sophisticated. The final chapter provides an understanding of the efficacy of two types of trade sanctions (import and export) using a directed network model. Sanctions are common punitive measures taken by a sender player to discipline a target player. Empirical evidences in the realm of international trade show differences in the effectiveness between import and export sanctions. This paper shows that such differences can be explained by one specific centrality feature of the underlying trading network — betweenness-centrality. This measure lends insights to the trade spill-overs following sanctions underscoring why sanctions are ineffective. I highlight when a higher value of this centrality acts as a sufficient condition towards effective sanction. Based on this analysis, one can conclude whether import or export sanction will be more effective for a given trade network.en
dc.description.abstractgeneralThree essays spanning across topics of political economy and Industrial Organization has been studied. The first essay `Media bias in the best and worst of times' studies how ideology-motivated (partisan) media firms try to create impressions to its audience about a particular issue to increase its payoffs from either of the two sources — reader trust and advocating its ideology. This trade-off depends on the type of issue at hand which either aggravates or moderates a media's wish to generate bias in its news. I investigate not only the degree of bias for any given event, but also study how profits of media are impacted from doing so. The second chapter `Monopoly pricing under wishful thinking' investigates the pricing strategies of a seller when he sells a non-durable product to a wishful buyer twice, over two time periods. Under two possible states of the world — textit{high} and textit{low} — the buyer can derives either a good or bad experience. It is assumed that a good experience is more likely than a bad one under textit{high} state. Would the buyer re-purchase the product after having a bad experience in the first period? A wishful buyer is overly optimistic about a good experience in the future even after a bad experience in the current period. Such optimism paves the way for pricing strategies in favor of the seller under certain conditions. My aim has been to highlight these conditions and draw comparison with a pricing model with non-wishful buyers. The third chapter investigates the effectiveness of trade sanctions. Such sanctions are imposed by a sender country against a target country when the latter has taken an action which the sender disapproves — initiating domestic war, building nuclear arsenals, etc. The sanctions are enforced until the target. However, only 30% sanctions are effective in disciplining the target. This paper studies if any feature of the trade network can explain why sanctions fail and what type of trade sanction — import or export — will be optimal in any given trade network.en
dc.description.degreeDoctor of Philosophyen
dc.publisherVirginia Techen
dc.rightsIn Copyrighten
dc.subjectmedia biasen
dc.subjectpartisan mediaen
dc.subjectHotelling's modelen
dc.subjectwishful thinkingen
dc.subjectbetweenness centralityen
dc.titleEssays in Industrial Organization and Political Economyen
dc.typeDissertationen Polytechnic Institute and State Universityen of Philosophyen
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