Essays on markets and information

This thesis contains three chapters on the interplay between markets and information. In the first chapter, I study how market opportunities influence the information revealed in longterm relationships. To this end, I build a model of employment relationships where the worker has private information about match quality, the firm learns about match quality over time, and the firm makes a match-specific investment. Improved market opportunities for workers promote productive relationships because they let the worker signal her firm-specific productivity by forgoing market opportunities. Signaling allows the firm to bypass the learning stage and encourages investment (signaling effect). Improved market opportunities for firms, however, discourage longterm relationships and undermine investment incentives (layoffs effect). I embed the relationship game in a search market equilibrium where market opportunities for both parties depend on search frictions and market thickness.

Name thesis:degree_name

Doctoral

Department dc:contributor.department

Massachusetts Institute of Technology. Department of Economics

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2019

Author dc:creator

• Gitmez, Ahmet Arda.

Advisor dc:contributor.advisor

• Daron Acemoglu, Parag A. Pathak, and Alexander G. Wolitzky.

• Economics.

Statement dc:rights

• MIT theses are protected by copyright. They may be viewed, downloaded, or printed from this source but further reproduction or distribution in any format is prohibited without written permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

https://hdl.handle.net/1721.1/122445

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/122445