Industrial Upgrade, Employment Shock and Land Centralization in China

This paper investigates the relationships among industrial upgrading, mid-aged peasants’ non-farm employment, and land conversion systems. We prove that China’s efforts to upgrade its industries generate a negative employment shock on mid-aged peasant workers, forcing some of them to return to their home villages. The current lump-sum land acquisition system, however, will neither help peasant workers deal with the adverse employment shock nor promote land centralization for industrial and urban uses. On contrary, land cooperation, an emerging land centralization system, will help peasant workers mitigate the adverse employment shock and centralize rural land for nonagricultural purposes.Peasant workers; Industrial upgrade; Employment; Land centralization

Industrial Upgrade, Adverse Employment Shock and Land Centralization

Traditional Development Economics defines economic development in the view of transferring rural surplus labor force. It implies the industrialization is in a static state at a certain level while it is in a process of continuous industrial upgrade in reality. Under the circumstances, we analyze phenomenon followed by the upgrading of industrial structure such as return migration and mid-aged rural labors’ difficulty in job-hunting and demonstrated the influence of land centralization based on the practice of industrial upgrade and rural change in Suzhou. Finally it come to the conclusion that because of the extensive competition on simple-labor market, the industrial upgrade will make a adverse employment shock upon mid-aged rural labor which will lead to the more uncertainty of peasants to get jobs in the industrial section . If government takes an improper policy of land centralization, peasants will lose guarantee in the future and resist the land centralization. After the comparison between one-off compensation and land cooperation, a further demonstration show that the method of one-off compensation will depress peasants’ enthusiasm in land centralization while the form of land cooperation can guarantee and promote peasants’ welfare under the given institution of land ownership. As a result, land cooperation allows the smooth operation of land centralization and supports the industrial upgrade to some extent.Over-confidence，Regional Government Competition，Redundant Construction，Yangzte River Delta

Optimal Monetary and Fiscal Policies In a Search-theoretic Model of Money and Unemployment

In this paper we study the optimal monetary and fiscal policies of a general equilibrium model of unemployment and money with search frictions both in labor and goods markets as in Berentsen, Menzio and Wright (2010). We abstract from revenue-raising motives to focus on the welfare-enhancing properties of optimal policies. We show that some of the inefficiencies in the Berentsen, Menzio and Wright (2010) framework can be restored with appropriate fiscal policies. In particular, when lump sum monetary transfers are possible, a production subsidy financed by money printing can increase output in the decentralized market and a vacancy subsidy financed by a dividend tax even when the Hosios’ rule does not hold.Search and matching, Fiscal polices,Money, Unemployment, Efficiency

Pricing, Advertising, and Market Structure with Frictions

This paper develops a model of pricing and advertising in a matching environment with capacity constrained sellers and uncoordinated buyers. Sellers' search intensity attracts buyers only probabilistically through costly informative advertisement. Equilibrium prices and profit maximizing advertising levels are derived and their properties analyzed. The model generates an inverted U-shape relationship between individual advertisement and market tightness which is robust to alternative advertising technologies. The well known empirical fact in the IO literature reflects the trade-off between price and market tightness-matching effects. Finally, in this environment we can alleviate the discontinuity problem, allowing for unique symmetric equilibrium price to be derived.Directed searching, Advertising, Pricing,Market structure

Pricing, Advertising, and Market Structure with Frictions

This paper develops a model of pricing and advertising in a matching environment with capacity constrained sellers and uncoordinated buyers. Sellers’ search intensity attracts buyers only probabilistically through costly informative advertisement. Equilibrium prices and profit maximizing advertising levels are derived and their properties analyzed. The model generates an inverted U-shape relationship between individual advertisement and market tightness which is robust to alternative advertising technologies. The well known empirical fact in the IO literature reflects the trade-off between price and market tightness matching effects. Finally, in this environment we can alleviate the discontinuity problem, allowing for unique symmetric equilibrium price to be derived.Directed searching; Advertising; Pricing; Market structure

Optimal Monetary and Fiscal Policies in a Search-Theoretic Model of Money and Unemployment

In this paper we study the optimal monetary and fiscal policies of a general equilibrium model of unemployment and money with search frictions both in labor and goods markets as in Berentsen, Menzio and Wright (2010). We abstract from revenue-raising motives to focus on the welfare-enhancing properties of optimal policies. We show that some of the inefficiencies in the Berentsen, Menzio and Wright (2010) framework can be restored with appropriate fiscal policies. In particular, when lump sum monetary transfers are possible, a production subsidy financed by money printing can increase output in the decentralized market and a vacancy subsidy financed by a dividend tax even when the Hosios’ rule does not hold.Search and matching; Fiscal polices; Money; Unemployment; Efficiency

A Rationale for Non-Monotonic Group-Size Effect in Repeated Provision of Public Goods

This paper analyzes the impact of a group-size change on contributing incentives in repeated provision of pure public goods. We develop a model in which the group members interact repeatedly and might be temporarily constrained to contribute to the public goods production. We show that an increase in the group size generates two opposite effects - the standard free-riding effect and the novel large-scale effect, which enhances cooperative incentives. Our results indicate that the former effect dominates in relatively large groups whilethe latter in relatively small groups. We provide therefore a rationale for nonmonotonic group-size effect which is consistent with the previous empirical and experimental findings

Three essays on advertising, search and economic policy

This dissertation uses search theory framework to study advertising, pricing and related pol-icy issues. It consists of three relatively independent essays across fields such as industrial organization, labor economics and monetary economics. In the first essay (Chapter 2), I study the interaction between information disclosure and information acquisition and the welfare implication of transparency policies. As the equilibrium market outcome, partial information disclosure is adopted when search cost is low and the equilibrium price is non-monotonic in search cost. Transparency policies may reduce consumer surplus due to resulted high price. In the second essay (Chapter 3), a directed search model is extended to incorporate imperfect observability and costly advertising. The equilibrium advertising and pricing patterns when sellers are capacity constrained are derived. The result on matching probability and expected payoffs also partly proves the robustness of canonical directed search models. The last essay (Chapter 4) explores the optimal fiscal and monetary policies in a money search model where search frictions present in both product market and labor market. I show that the first-best allocation might be achieved in both product market and labor market if a generalized Hosios’ rule is met

Horizontal mergers in the presence of vertical relationships

We study welfare effects of horizontal mergers under a successive oligopoly model and find that downstream mergers can increase welfare if they reduce input prices. The lower input price shifts some input production from cost- inefficient upstream firms to cost-efficient ones. Also, the lower input price makes upstream entry less attractive, reduces the number of upstream entrants, and decreases their average costs in the presence of fixed entry costs. We identity necessary and sufficient conditions for a reduction in input prices and welfare-improving horizontal mergers under a general demand function. Qualitative nature of our findings remains unchanged for upstream mergers

Informative Advertising, Consumer Search and Transparency Policy

Information about a new or non-frequently purchased product is often produced by both sides of the market. We construct a monopoly pricing model consisting of both seller's information disclosure and consumer's information acquisition. The presence of consumer search, which lowers the probability of making sales, creates incentive for the monopolist to deter search. In contrast with most previous literature, we show that, partial information disclosure arises in equilibrium when the search cost is low. As the search cost increases to medium level, the monopolist hides information but lowers the price to prevent consumers from searching. When the search cost is very high, the monopolist charges high price and hides all information. The equilibrium price is thus non-monotonic in search cost. Information disclosure and consumer search co-exist only when the search cost is low, and thus complement each other. We show that transparency policies on advertising cannot improve social welfare. Nevertheless, they benefit consumers in a wide range of values of the search costs by improving matching quality and reducing the expense of searching. But for some medium levels of search costs, transparency policies hurt consumers due to the induced high price in equilibrium