Source: Dissertation Abstracts International, Volume: 63-03, Section: A, page: 1043.

Director: Stephen Morris.

In the first essay in this dissertation, "Modelling Beliefs in Games with Generalized Preferences," I bring together two strands of recent research in the decision theoretic foundations of games. One strand deals with the extension to games of models of behavior where players' preferences deviate from subjective expected utility maximization. The other strand investigates the epistemic foundations of non-expected utility behavior, studying the notions of belief generated from primitive consistency axioms on preferences. By exploring a minimal preference structure compatible with games from a subjective viewpoint, I provide a framework within which extensions of single-person decision theory to games can be compared and evaluated.

In the second essay, "Price Dispersion in the Wholesale Market for Steel," I look at the factors underlying price discrimination from an empirical perspective. I study the pricing decision of a durable commodity intermediary. The firm, a U.S. steel supplier, has provided daily data on purchases, sales, and inventory holdings on the products it carries. I find considerable dispersion in prices, both in the short term and over the long run. Apart from quantity discounts and local market power, the identities of the buyers affect the pricing decision of the seller, and there also seems to be a premium to information. The analysis suggests that there are substantial inefficiencies in the market for steel, and that buyers might benefit considerably from increased transparency in the market as a whole and lower barriers to search.

In the final essay, titled "Motivation, Perception and Morale," I explore some of the ways in which motivation depends on one's perception of the actions and intentions of others. I sketch a simple example in a two-person signalling game where an agent who cares intrinsically about the principal's perception of him extracts information from her actions. In the unique separating equilibrium, the principal is able to signal her beliefs about the agent's motivation through her choice of wage. Evidence indicates that the psychological effects of monetary rewards are important in their own right. A richer treatment of the inner lives of economic agents is therefore important to understanding a number of issues not explained fully by standard economic theory.