Essays in applied economic theory

Official URL: http://192.168.1.20/record=b1505252 (Table of Contents)

This dissertation consists of two chapters that are independent of each other. Each of them represents an area of my research interests. The first chapter contributes to the fascinating and growing literature of Family Macroeconomics. In this chapter, we offer a simple theory that explains why polygyny marriage has almost disappeared in modern industrialized countries although it had been common in most of the societies throughout history. We demonstrate that the increase in labor income through the process of economic development has led to the rise of monogamy. Specifically, we show in a general equilibrium model of marriage market that the increase in labor income improves women's outside option, monogamy mating. This, in turn, reduces polygyny by increasing the cost of polygyny mating for men. The second chapter is a joint work with Eren Inci and it contributes to the financial economics and career concerns literatures. In particular, we analyze how CEOs' layoff risk affects their risk choice in overseeing the firm. We provide a novel mechanism in which CEOs can change market's belief about their ability by their risk choice. We show that a CEO can decrease her layoff risk by taking excessive risk and trade off current compensation for layoff risk. We allow for any linear combination of fixed-wage and stock compensation and show that there are market structures in which explicit incentives are not helpful in preventing CEOs from taking excessive risk.