Essays in Economic Theory

Abstract

My dissertation is composed of three chapters. In the first, I study the incentive role of information – how the strategic release of information can induce an agent to exert more effort on a project. More specifically, I focus on how feedback can be provided to a worker who is uninformed about the progress they make on a long term project. I show that delaying feedback about their performance can induce the worker to continue working on the project longer than they would were they to learn about their performance without delay. Negative feedback, due to the absence of good news, received in the early stages of the project can cause them to quit prematurely. In the second chapter, I study a model of matching between individuals and institutions. Matching models allow researchers to identify optimal allocations of individuals to school seats, medical residency programs and other positions over which individuals have preferences and for which they may differ in suitability. While we know that in models in which individuals only care about the institution they match with, stable matchings always exist, I show that when individuals also care about the the number of matches made by the institution they join, stable matchings no longer exist in general. I show that stable matchings can only be found under a set of conditions I identify. Relaxing any of these conditions leads to examples of markets with no stable matchings. In the third chapter, I set out to understand why elected politicians choose to toe the party line instead of voting on issues according to their own preferences. I find that despite the short term benefits of voting for their preferred policies, there are long-term benefits from coordinating their voting behavior among like-minded legislators. These findings provide a rationale for why political parties form among politicians with similar policy positions.