ESSAYS IN BEHAVIORAL INDUSTRIAL ORGANIZATION AND NATURAL RESOURCE ECONOMICS.

Thesis (Ph.D.), Economics, Washington State UniversityThis dissertation analyzes firms' side problems in economics using an industrial organization approach to provide analysis and policy tools. In the first paper (Chapter 2), I analyze a setting in which firms appropriating the same common pool resource, such as fishing grounds or forests, have equity shares in one another's profits. I identify the firms' decisions of how much equity to acquire in equilibrium, the social planner's optimal equity shares and potential policy tools inducing firms to voluntarily choose socially optimal shares under this setting. In the second paper (Chapter 3), I extend the model of the first paper to a context of a Cournot duopoly. The key difference in this setting is that firms now have market power, and hence, their production influences market price. However, unlike in a common pool resource setting, their production does not affect the production cost of their rivals. I also identify the firms' decisions of how much equity to acquire in equilibrium, the social planner's optimal equity shares and potential policy tools inducing firms to voluntarily choose socially optimal shares under this setting. In the third paper (Chapter 4), I consider a setting in which consumers, who can afford to pay their bills on time, pay them late with a penalty due to various behavioral biases. In such a setting, I show how a firm can exploit consumer biases to increase its profits by either: (1) choosing very high penalties and collecting them from a smaller number of consumers who pay their bills late in-spite of the high penalty; or (2) setting very low penalties and inducing more people to pay late, thus collecting a smaller penalty from a larger population.Washington State University, Economic