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Essays in Microeconomic Theory

  • Author(s): Liu, Ce
  • Advisor(s): Chambers, Christopher P.
  • Sobel, Joel
  • et al.
Abstract

The first chapter studies repeated matching markets, where in every period, a new generation of short-lived workers is matched to a fixed set of long-lived firms on the other. I characterize self-enforcing arrangements for two types of environments. When wages are rigid, as in the matching market for hospitals and medical residents, players can be partitioned into two sets: regardless of patience level, some players can be assigned only according to a static stable matching; when firms are patient, the other players can be assigned in ways that are unstable in one-shot interactions. I also discuss these results’ implications for market design. When wages can be flexibly adjusted, I show that repeated interaction resolves well-known non-existence issues: while static stable matchings may fail to exist with complementarities and/or peer effects, self-enforcing matching processes always exist if firms are sufficiently patient.

The second chapter provides revealed preference characterizations for choices made under various forms of costly information acquisition. We examine nonseparable, multiplicative, and constrained costly information acquisition. In particular, this allows the possibility of unknown time delay for acquiring information. The techniques we use parallel the duality properties in the

standard consumer problem.

The third chapter provides a universal condition for rationalizability by risk-averse expected utility preference in a demand-based framework with multiple commodities. Our test can be viewed as a natural counterpart of a classical test of expected utility, due to Fishburn (1975), in a demand setting.

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