▼ Dispersion of prices of essentially homogeneous products has fascinated economists for decades. Explanations for the phenomenon include lack of information on the part of consumers (Stigler, 1961; Rothschild, 1973; Salop and Stiglitz, 1977); absence of market power, or ability to collude, on the part of producers (Means, 1935, 1939; Stigler and Kindahl, 1970; Carlton, 1986; Caucutt, Ghosh, and Kelton, 1999); uncertainty in pricing introduced by inflation or macroeconomic shocks (Vining and Elwertowski, 1976; Domberger, 1987; Van Hoomissen, 1988); and simple pricing independence of downstream resellers (Lafontaine, 1995, 1999). Our research offers the first integrated empirical study of price dispersion in the sense of explicitly accounting for all but the fourth explanation; we implicitly acknowledge the fourth. The theoretical foundation for our study is the Salop and Stiglitz two-price equilibrium in a monopolistically competitive market. After introducing variables that capture the comparative-static results from the Salop and Stiglitz equilibrium (including variables that account for the costs of consumer search), we add market-structure and inflation variables as well. We have a rich, unique data set of monthly gasoline prices from January 1984 through December 1998 for three different grades of gasoline at thirty-four gasoline stores spread across three geographic market zones within the Greater Cincinnati Metropolitan Area. We follow the time-series procedures of Granger and Newbold (1974) and Phillips (1986) in ensuring variable stationarity before model estimation. We find support for the positive impacts on dispersion of lack of consumer information, low seller concentration, and inflationary pressure. Moreover, differences in results across brands of gasoline, grades of gasoline, and geographic zones lend additional support to the lack-of-consumer-information hypothesis. Finally, as a byproduct of our research, we shed some light on the mechanics of gasoline price determination – a topic of important, recurring national interest. Advisors/Committee Members: Kelton, Christina M. L.

▼ This dissertation develops a model that incorporates foreign competition within the banking system of a developing country. The main justification for which foreign banks decide to enter a local market is that they may exploit competitive advantages. From the host country’s point of view, the advantages of foreign bank participation are: 1) it brings more variety of services that customers have access to; 2) the higher level of competition reduces the interest spread in the country; 3) it reduces the lack-of-liquidity problem as banks may have access to foreign funding. This dissertation uses an oligopolistic approach to analyze the banking sector. The markets where banks compete may be affected by changes in the interbank market as well as other exogenous parameters (i.e., administrative costs, credit risk, exchange rate, etc.). In particular, it is found that when the local banking system is inefficient (relative to international standards) or faces a high level of credit risk, the developing country is better off with an open-door policy. It is also showed that foreign participation softens negative shocks in the economy. In addition, it is seen that as the foreign subsidiary overcomes initial difficulties, it becomes more independent of its parent bank. Moreover, we observe the interdependence of the economies of the host country and the parent nation, in terms of monetary policy, associated with foreign-bank participation. Advisors/Committee Members: Pal, Dr. Debashis.

▼ We survey the literature on mixed oligopolies and detected that it has ignored, among other things, the effects resulting from changes in assets ownership as well as the location resulting when firms compete to set up their facilities and then they compete in quantities in a linear market. The former is important because decisions to increase the industry's stock of capital, the sale of it among firms, or its joint ownership, lead to different behavior and performance of the industry. Therefore, we investigate how the change in asset ownership affects price, firms' profit, welfare and industry concentration. We also analyze if there is a negative correlation between industry concentration and welfare. We find out that the direction in price changes, firms' profit and industry concentration depend on how asset ownership changes. Further more, we find no correlation between industry concentration and welfare. It has been shown in a private oligopoly, that if firms compete first in location choice, and then in quantities, they will choose to agglomerate at the market center. We investigate if the presence of a public firm breaks down this agglomeration. In our analysis of mixed duopoly we show that whether or not firms agglomerate, depends on the cost differential between the private and the public firm. No agglomeration results if the cost differential is small, i.e. c < 1/2, but it will emerge at the market center otherwise. We also show that some consumers, and the private firm, may be better off under a private duopoly than in a mixed duopoly. Advisors/Committee Members: Pal, Debashis.

▼ The goal of education is multi-faceted. In an effort to instill achievement, positive attitude formation, and edification, teachers lead students to the discovery of new ideas and implementation of learned material. This paper uses a multiple-output learning production model based on the information-processing approach to learning, using data from introductory economics courses a large research university. This paper makes a contribution by formulating a metric of usefulness or edification. In addition, extensive survey of student goals, aspirations, and attitudes provides a fruitful explanatory power. The results are encouraging in assessing the development of the affective domain as well as the cognitive domain of educational objectives. Application of experimental curriculum also appears to stimulate the development of both the cognitive and affective domain. Advisors/Committee Members: Escoe, Dr. Gisela M.

▼ Sub-Saharan Africa has been perceived as a very high-risk place for investment for diverse reasons, including incredible rules, systemic corruption, political instability and social unrest, lack of formal mechanism of contract enforcement and insecure property rights. Because of this perception, investors are reluctant to commit capital. Our case- studies in Mali and Burkina Faso, suggest that these beliefs are well - founded; the lack of contract discipline is real. Firms and businessmen prefer to rely on mechanisms of commercial enforcement based on personal recommendations, repeated interactions as they lack confidence in the legal system and the effectiveness of the judiciary. In the empirical cross- country analysis section, we attempt to build some link between this lack of formal mechanism of contract enforcement (or secure property rights) and investment and economic growth. The empirical section investigates the general proposition that insecure property rights lower growth by limiting capital accumulation. Variables that capture political violence and secure property right are introduced in the framework popularized by Barro and Sala-I-Martin for cross-country growth analysis to shed light on these relationships. Evidence from 48 Sub-Saharan African countries does not bring any support to our first claim that insecure property rights deter investment. However, the cross-country growth analysis shows a significant negative relationship between Gastil index and growth. In this study, Gastil index measures political freedom and civil liberties in a given country. The higher this index, the lower political freedom and civil liberties for the country. This negative relationship between Gastil index and growth confirms our hypothesis that insecure property rights reduce growth. Advisors/Committee Members: Wolfgang, Dr. Mayer.

▼ Every year, according to the National Cancer Institute (NCI), almost 180,000 women in the United States are diagnosed with breast cancer. Sadly, about 46,000 women die each year from breast cancer. With 46,000 deaths, breast cancer ranks just behind lung cancer as the leading cause of cancer death in women. Studies show that early detection of breast cancer through mammography (X-ray) and clinical breast examination tremendously increases the chance of survival. According to the Department of Health and Human Services, if breast cancer is detected early, the five-year survival rate is above 90 percent. Mammography and clinical breast examination, therefore, are considered two forms of investment in health. The objective of this dissertation is to theoretically and empirically investigate the effects of different economic and social variables on the demand for mammography and clinical breast examination as two forms of secondary preventive medical care services. Unlike primary preventive medical care, secondary preventive medical care does not decrease the chance of getting sick but instead it reduces the consequences of illness through early detection. An expected utility maximization theory is used to model the demand for secondary preventive medical care. The results of the theoretical investigation suggest that the demand for secondary preventive medical care depends on the income, the level of education, the wage rate, the price of secondary preventive medical care, the rate of depreciation in health, and the price of curative medical care. Logistic regression models are used to empirically investigate the validity of the theoretical findings. The national data used for this study come from the 1996 Medical Expenditure Panel Survey (MEPS). The 1996 MEPS provides extensive data on the use of medical care and health services in the United States. The empirical results not only support the theoretical findings, they also result in important new findings. Hispanic women are found to be either more likely or just as likely as white and black women to obtain annual or biennial mammograms and clinical breast examinations. These findings are new and to the best of our knowledge have not been reported before. Advisors/Committee Members: Goddard, Haynes.

▼ Search engines are considered a crucial link between the firms and the consumers, since their job is to match the two. There are two regimes that the search engines subscribe to while displaying the search results in response to a consumer's keyword based search query: the unbiased regime and the biased regime. The unbiased regime is based on the relevancy of the consumer's keywords to the keywords supplied by the firms' web sites, and is free of cost. Whereas, under the biased regime, the search engine requires the firms to buy from it the keywords that are relevant to the identification of one's web site. This dissertation emphasizes the importance of the first page of the search result for both the firms and the search engines, while analyzing the business practices of a biased search engine. The first essay primarily deals with the analysis of the issues pertaining to securing a position in the first page of the search result, and the consequent well being of the firms that are not strategically linked to a search engine. An inverse relationship has been shown to exist between the size of the search engine and the total number of spots allocated to the non-member firms. The size of the search engine refers to the number of firms that are strategically linked to the search engine. A smaller sized search engine is more likely to serve the well being of the non-member firms while displaying the search results. Additionally, a smaller sized search engine is more likely to switch the search result regime from the unbiased to the biased, and in turn, more likely to serve the well being of the non-member firms as compared to any larger sized search engine. The second essay explores the impact of the improved search engine technology on a firm's decision variables; namely, the price-cost mark up and the reach to the consumers. It has been shown that the price-cost markup of a firm increases, and the reach to the consumers decreases as a result of an improved search engine technology. Moreover, brand proliferation is a possibility under the product category. Advisors/Committee Members: Dr. Wolfgang Mayer, Dr. Debashis Pal.

▼ This dissertation employs a political economy approach to study the joint determination of federal and state level policies in an economy with a federal form of governance. A formal framework is developed that captures strategic interactions between federal and state governments as well as strategic interactions between special interest groups and policymakers. This analytical framework is subsequently used to analyze the policy implications of multilateral lending under policy conditionality. In the first section of the dissertation, we consider a case in which the small economy government has access to a single instrument of policy for political redistribution. This case serves as a useful benchmark for subsequent analysis wherein each level of governance retains access to a redistributive policy tool. The results of the benchmark case illustrate that policy-making at the highest level of governance helps to reduce the extent of policy-induced distortions. Moreover, earmarking of multilateral lending for particular states of a federal economy results in the same policy outcome as the one when the multilateral loan is disbursed to the federal government. When each level of governance enjoys access to a redistributive instrument, results of the model are determined by the equilibrium relationship between the two policies. If, in equilibrium, the state-level policy behaves as a strategic complement to the policy set at the center, earmarking of the loan to the least protectionist state governments reinforces the decline in trade distortions in the economy. This leads to a higher level of social welfare in the economy as a whole. Alternatively, if the two policies are strategic substitutes in equilibrium, then although conditional lending to the federal government tends to reduce the extent of distortions caused by the federal policy, the state-level policy-induced distortions tend to rise as a consequence. In such situations, by additionally earmarking the loan to the least protectionist state governments, multilateral conditionality lending tends to contain the rise in state-level policy distortions. In the final section of the dissertaiton, we describe how the political and economic factors interact in a small economy and determine the government's choice between alternate policy instruments. The small economy will choose trade policy as the redistributive instrument, in the present, if expected gains from trade negotiations in a future period and the associated political support, are such sufficient to compensate for current political and economic losses. Advisors/Committee Members: Mayer, Dr. Wolfgang.