Essays on industrial organization
Abstract/Contents
- Abstract
- This dissertation comprises three papers. The first, "Strategic Exploration: Search and Learning in the UK Oil Industry" investigates the effects of information spillovers in oil exploration. I use data covering the history of offshore oil and gas wells in the UK to measure the effect of information spillovers on industry profits and compute counterfactual property rights allocations that minimize the free riding problem. I find evidence of spatial learning across license blocks and information spillovers between firms exploring the same region -- firms are more likely to drill exploration wells after rival firms have made discoveries nearby. To evaluate the effect of these spillovers on industry profit, I estimate a structural model of the firm's dynamic exploration problem in which firms have spatially correlated beliefs about the location of oil deposits which they update after observing well outcomes. Since firms are forward looking they have an incentive to delay exploration if they are able to observe the results of competitors' wells. On the other hand, if firms are unable to learn from each other's exploration this can lead to inefficient duplicative exploration of unproductive regions. Policy simulations using the estimated model highlight the trade-off between discouraging free riding and encouraging efficient cumulative research - stronger property rights over exploration well data increase the rate of exploration, while weaker property rights increase the efficiency and speed of learning but reduce the rate of exploration. The findings relate to the general problem of the design of property rights in R& D, for example the optimal breadth of patents. The second paper, "You Can Lead a Horse to Water: Spatial Learning and Path Dependence in Consumer Search, " coauthored with Gregory Lewis, develops a model of the consumer's search and learning problem in online retail that is based on a similar "spatial learning" framework. We show that a model of search in which consumers make inferences from those products they observe to similar, unobserved products can explain patterns in data on online consumer behavior. We estimate the model using data on the sequence of products viewed by consumers shopping for digital cameras, and show in a counterfactual how search platforms can manipulate consumers beliefs to change their search paths. The third paper, "Trade-ins and Transaction Costs in the Market for Used Business Jets, " studies the interaction between the markets for new and used durable goods and the incentive for manufacturers to buy back and resell used units. I quantify the equilibrium effects of manufacturer buyback schemes in the market for used business jets. I find that removing buyback decreases demand for new jets among replacement buyers by 45% at fixed prices and raises used jet prices by 7% in equilibrium. Although the effect on used jet prices induces substitution towards new jets, manufacturer revenue is lower without buyback.
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource. |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2019; ©2019 |
| Publication date | 2019; 2019 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Hodgson, Charles Bruce Cuthbert |
|---|---|
| Degree supervisor | Einav, Liran |
| Thesis advisor | Einav, Liran |
| Thesis advisor | Bresnahan, Timothy F |
| Thesis advisor | Gentzkow, Matthew |
| Degree committee member | Bresnahan, Timothy F |
| Degree committee member | Gentzkow, Matthew |
| Associated with | Stanford University, Department of Economics. |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Charles Hodgson. |
|---|---|
| Note | Submitted to the Department of Economics. |
| Thesis | Thesis Ph.D. Stanford University 2019. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2019 by Charles Bruce Cuthbert Hodgson
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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