ESSAYS IN INDUSTRIAL ORGANIZATION AND ECONOMETRICS

Jiaying Wang

doi:10.7273/000006538

This dissertation consists of three chapters that explore different aspects of industrial organization and Bayesian econometrics. In the first chapter, I examine the impact of increased market concentration and consumer information on price dispersion in the US airline industry. Using data from three recent mergers, I find that mergers and increased levels of consumer information are positively correlated with price dispersion in the Southwest Airlines-AirTran Airways merger, suggesting that consumer information can enhance the merger effect on price dispersion. These results have important implications for antitrust policy in e-commerce and internet-based industries. In the second chapter, I investigate how legacy and low-cost incumbents respond to the threat of entry by Spirit in the US airline industry. I find empirical evidence of preemptive actions by incumbents in response to Spirit’s entry threat, with both legacy and low-cost incumbents increasing their prices significantly. I also find that they raise their prices more aggressively when they have more market power. The impact of the threat of entry by Spirit is larger on the low-cost incumbent’s capacities. In the third chapter, my coauthors and I intend to identify the risk factors associated with adolescent marijuana use in Washington State, utilizing data from the 2018 and 2021 Healthy Youth Survey (HYS). Despite the survey's assurance of anonymity, the possibility of over- or under-reporting exists due to various reasons, such as fear of being exposed, social stigma, and peer pressure. We are also interested in identifying factors that are associated with the occurrence of misreport. To achieve these goals, we develop a full Bayesian framework with a two-level latent linear regression model. The top level is for the true Marijuana use response and the second level is for the occurrence of misreporting. We propose a partially collapsed Gibbs Sampling algorithm with a Metropolis-Hastings step to sample the regression coefficients. Simulation studies have been conducted to demonstrate the superior performance of the proposed method over alternative approaches. Our analysis of the HYS data discovers multiple factors for identifying at-risk adolescents and informing future prevention efforts.

ESSAYS IN INDUSTRIAL ORGANIZATION AND ECONOMETRICS

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