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Essays in Economic Theory

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dc.contributor.authorLiu, Yaojunen
dc.contributor.committeechairSarangi, Sudiptaen
dc.contributor.committeememberKovach, Matthewen
dc.contributor.committeememberBahel, Eric A.en
dc.contributor.committeememberTserenjigmid, Gerelten
dc.contributor.departmentEconomicsen
dc.date.accessioned2022-05-19T08:00:07Zen
dc.date.available2022-05-19T08:00:07Zen
dc.date.issued2022-05-18en
dc.description.abstractIn this study, I introduce the alternative-dependent focal Luce model (ADFLM), a random choice model generalizing the well-known Luce model (1959). In the ADFLM, focal alternatives are chosen more frequently relative to their utilities. I identify utilities, focal sets, and the magnitude of focal biases from choice data. Additionally, I axiomatically characterize the ADFLM by weakening the independence of irrelevant alternatives (IIA) axiom. This model can explain the well-known behavioral phenomena, the attraction and compromise effects. Furthermore, I also study the seller's profit maximization problem in the ADFLM. I also study an asymmetric dynamic patent race with a deadline under complete information. In my model, two firms decide whether to invest in RandD. The patent arrives randomly according to a Poisson process, and the large firm has a higher hazard rate than the small firm. I find the unique sub-game perfect Nash equilibrium strategy for this game. At the equilibrium, the large firm will stay longer in the race, while the small firm will quit earlier. The large firm's optimal stopping time is not affected by the competition, while the small firm's stopping time is reduced. Additionally, I find that companies will remain longer in the race if the investigation cost is lower, the winning premium is higher, the deadline is extended further, and the hazard rate is more prominent. Moreover, the market becomes more efficient with the competition since the patent is easier to realize.en
dc.description.abstractgeneralIn this research, I study the consumer's behavior when individuals have limited cannot or do not give the same attention to each alternative available to them. In my study, I characterize the alternative-dependent focal Luce model (ADFLM), a consumer behavior model. Moreover, I solve the seller's profit maximization problem when the consumer's behavior follows the ADFLM. Meanwhile, I also study a dynamic patent race problem that occurs when firms compete for a patent with a deadline. If no firms achieve the patent, the stopping time (when the firm quits the patent race) of the large firm's (with a higher success rate every period) is not affected by the introduction of the small firm. However, the small firm quits earlier when the large firm is introduced. The competition between the two companies increases the overall probability of receiving a patent.en
dc.description.degreeDoctor of Philosophyen
dc.format.mediumETDen
dc.identifier.othervt_gsexam:34424en
dc.identifier.urihttp://hdl.handle.net/10919/110116en
dc.language.isoenen
dc.publisherVirginia Techen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectRandom Choice Ruleen
dc.subjectAlternative-Dependent Focal Luce Modelen
dc.subjectIIAen
dc.subjectFocal Seten
dc.subjectPatent Raceen
dc.subjectSub-game Perfect Nash Equilibriumen
dc.subjectComplete Information.en
dc.titleEssays in Economic Theoryen
dc.typeDissertationen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.nameDoctor of Philosophyen

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