Three essays in experimental economics
Abstract/Contents
- Abstract
- The first chapter estimates the dynamic effects of credit availability on consumer borrowing and spending decisions using unique longitudinal data on consumer income, spending, balance sheets, and untapped credit, and a test-tube exogenous shock to credit availability. I design and implement a randomized trial at a European retail bank where I deliberately vary the credit lines of 54,522 pre- existing customers. I obtain four empirical results: (1) credit availability has a large and significant effect on spending and the use of credit; (2) this effect is not confined to a small set of credit constrained consumers; (3) increases in spending are concentrated in durables and services (e.g., health, education), made in the wake of positive income shocks; (4) credit line utilization displays mean-reverting dynamics, i.e. strict credit constraints are transitory. In the second chapter, I use the findings provide novel tests of competing models of intertemporal behavior. The findings rule out a simple permanent income model, a range of myopic models (e.g., rule-of-thumb, impatient), models where forward looking agents face a binding credit constraint and the baseline buffer-stock model. On the contrary, findings indicate that the primary affects of credit shocks is on consumers whom are not strictly constrained, through a portfolio problem. I then builds a partial equilibrium incomplete markets model with illiquid durables, and uses the endogenous ex- post heterogeneity to deliver many aspects of the magnitude, heterogeneity, composition and the dynamics of the marginal propensity to consume out of liquidity quantitatively. The third chapter, joint work with Jim Andreoni, Blake Barton, Doug Bernheim and Jeffrey Naecker, studies how people think about fairness in settings with uncertainty: one view holds that fairness requires equality of opportunity; another holds that it requires equality of outcomes. We conduct a laboratory experiment designed to determine which perspective people adopt, and under what conditions. We find that most people view fairness from an ex ante perspective when making decisions ex ante, and from an ex post perspective when making decisions ex post. As a result, they exhibit the hallmark of time-inconsistency: after making an initial plan that is fully state-contingent, they revise it upon learning that certain states will not occur. These patterns are robust and persist even when people are aware of their proclivities. We argue that these patterns are best explained by a theory of nominal fairness.
Description
| Type of resource | text |
|---|---|
| Form | electronic; electronic resource; remote |
| Extent | 1 online resource. |
| Publication date | 2016 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Associated with | Aydin, Deniz |
|---|---|
| Associated with | Stanford University, Department of Economics. |
| Primary advisor | Bernheim, B. Douglas |
| Thesis advisor | Bernheim, B. Douglas |
| Thesis advisor | Beshears, John (John Leonard) |
| Thesis advisor | Pistaferri, Luigi |
| Advisor | Beshears, John (John Leonard) |
| Advisor | Pistaferri, Luigi |
Subjects
| Genre | Theses |
|---|
Bibliographic information
| Statement of responsibility | Deniz Aydin. |
|---|---|
| Note | Submitted to the Department of Economics. |
| Thesis | Thesis (Ph.D.)--Stanford University, 2016. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2016 by Deniz Aydin
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
Also listed in
Loading usage metrics...