College of Behavioral & Social Sciences
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Item Essays on the Impact of Social Influence in Industrial Organization and Political Economy(2020) Dalmia, Prateik; Filiz-Ozbay, Emel; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation theoretically and experimentally investigates the impact of social pressures in markets and politics. In the first chapter, I provide a micro-foundation for persuasive advertising of conspicuous goods that can either be made more attractive by greater popularity ("conformist markets") or by greater exclusivity ("snobbish markets"). Consumers are endowed with a latent attribute measuring some aspect of their identity, and a social status implied by this attribute. Consumers wish to signal a high status, and the function of advertising is to render brands a signaling device by linking products with social identity. In a conformist market, I find that advertising increases demand elasticity, inducing firms to converge on low prices, and can be used by a first mover to deter entry and gain monopoly rents. In this setting, advertising creates a cutthroat environment in which only one product can survive. In a snobbish market, advertising reduces demand elasticity, dampens price competition and promotes firm entry. In this setting, advertising can act as a public good to firms, increasing all firms' prices and profits. Additionally, it can lead to asymmetric equilibria where a firm appealing to high status consumers advertises more heavily, capturing a greater market share and charging a higher price. In the second chapter, Emel-Filiz-Ozbay and I consider a moral hazard problem where workers decide how much effort to put into individual projects that can succeed or fail. In our setting, workers may receive feedback about a partner's outcome, and such pay comparisons might influence their effort. We perform a laboratory experiment and find that subjects who failed increase their effort the next round. Moreover, subjects who failed while their partner succeeded increase their effort more than those whose partner also failed -- consistent with an aversion to being behind. We find that this effect is more pronounced for female subjects than male subjects. In the third chapter, Allan Drazen, Erkut Ozbay and I study the potential tension between between intrinsic reciprocity and forward-looking, instrumental motives. We perform an experiment in a political economy context where incumbent officials may have two competing desires. The first is the intrinsic desire to reciprocate to the kind actions of past voters by investing in policies favorable to them; and the second is the selfish desire to be reelected by investing in policies favorable to future voters to signal policy preference congruence with the latter. Our key finding, both theoretically and experimentally, is that when future and past voters do not perfectly overlap, reelection motives may constrain the intrinsic reciprocity of an elected leader to the voters who put her in office, but do not eliminate it entirely.Item The International Political Economy of Fascism(2018) Wasser, Matthias; Korzeniewicz, Patricio; Sociology; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation focuses on the intersection between security, governance, and the international economic system in the interwar period - constructing an analytic narrative to explain why so many states adopted the policy prescriptions of the radical right, which states did so, and what form these prescriptions took. While many new authoritarian states were established in the 1920s - and Fascist Italy was not the only one where radical right activists played a major role in regime consolidation - the ends pursued by these states were largely traditional. In the wake of the Great Depression, however, the difficulties in simultaneously attaining full employment, freedom of labor, and profitability forced capitalist states to adopt active macroeconomic policies - and, in turn, either move left, assigning labor a significant role in governance, or right, repressing organized labor. The fascist and “para-fascist” regimes which would be established in the 1930s would represent a renegotiation - whether brokered from within democratic or extra-democratic politics - between these conservative elites and fascist activists. Although the balance between the two would differ from place to place - from especially strong movement activists in Germany to especially strong traditional elites in Japan or Balkan royal dictatorships - all of these new compacts represented a willingness of the conservative elites to turn their back on economic and geopolitical liberalism forever. Which path elites chose to take, I argue, depended upon their positionality in the world economy. High-mobility fractions of capital were concentrated in the leading states, could discipline governments through exit, and benefited from a worldwide open market economy. Low-mobility fractions of capital, by contrast, especially those attached to semiperipheral states, needed to discipline governments through monopolies on voice. Further, relatively richer economies at the core of the world-system were in a better position to compromise with labor. This process resulted in a polarization within countries and in turn a polarization among countries - in favor of a relatively more liberal and international capitalism as against a relatively more nationalist and state-monopoly variant of capitalism.Item Empirical Essays in Comparative Institutional Economics(2007-05-02) Mukashev, Yerzhan Bulatovich; Murrell, Peter; Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Essay 1 investigates an empirical link between institutional variables and the performance of firms based on cross-country firm-level survey data. Current empirical evidence based on this type of data is unsatisfactory because employing survey responses as direct measures of institutional concepts and using those to analyze the effects of institutions at the firm level would limit the researcher to findings only within countries effects. This happens at the expense of losing inherent cross-country variation in institutions. Essay 1 offers a simple conceptual framework that decomposes survey responses for each firm into the average of their country and a residual firm-specific component. Importantly, the estimation results indicate that both variations have clearly different effects on growth of sales of firms. Essay 2 estimates the causal effects of economic shocks on the incidence of politically destabilizing events. The estimation is difficult due to the joint endogeneity between economic growth and events related to the political environment, which is addressed by the instrumental variable method. The variation in oil prices is used as an instrument for economic growth in the sample of small oil importing economies during 1960 - 1999. In contrast to a common belief and OLS estimates, the most striking finding of the IV estimation is that higher economic growth has a strong and robust positive effect on the incidence of relatively peaceful unrest such as demonstrations, strikes and riots. Essay 3 studies the question of differences in economic growth rates between Democratic and Republican governorships in the United States. The question is difficult to answer by simply comparing growth rates because the party affiliation is not randomly selected during elections. The empirical analysis employs the Regression Discontinuity Method to address the endogeneity in the party control variable. Focusing on very close elections permits the generation of quasi-experimental estimates of the impact of a "randomized" change in party control at the 50 percent threshold. When comparing Democratic with Republican governorships, the results are suggestive about the possibility of slightly worse performance of Democratic governors but the lack of statistical significance does not fully support this evidence.Item Política Económica en Aguas Borrascosas: Vulnerabilidad Financiera en Economías Emergentes(2000-10-26) Calvo, Guillermo A.Es para mí un gran honor y me hace muy feliz recibir el Premio de Economía Rey Juan Carlos, instituido por la Fundación José Celma Prieto. No hay un hecho más evocativo y emocionante para un latinoamericano que recibir un premio de la Madre Patria y que lleva el nombre de Su Majestad. Me siento muy agradecido, además, porque se cita mi labor científica, en contraposición a mis aventuras como pronosticador de crisis financieras. La ciencia económica es muy imprecisa pero es un pilar importante de la paz y la democracia. Sin ella, le sería muy difícil al gobierno tener un diálogo constructivo con los ciudadanos. La política económica no estaría sujeta a ningún tipo de disciplina intelectual. Al final del día sólo quedaría la violencia o la dictadura para dirimir estas cuestiones. Esa ha sido siempre la razón práctica de mi interés por esta disciplina. Un premio tan prominente como el que se me ha concedido, me da la plataforma para dar ese mensaje a las generaciones futuras. Muchas gracias.