Essays on economic behaviour and regulation/ Subrato Banerjee

Thesis (Ph.D.) - Indian Statistical Institute, 2016

Introduction -- Set Contraction and Bargaining Outcomes: A Laboratory Experiment -- Dictator Games in the Field: The Private Moral Calculus of Economic Agents -- Testing for fairness in regulation: Application to the Delhi transportation market

Guided by Prof. Bharat Ramaswami

This thesis offers a comparison of the ideas of theorized bargaining with actual bargaining behavior in a laboratory (chapter 2), a field (chapter 3), and a market (chapter 4). Each chapter is motivated with real life examples. The second chapter, for instance, in a controlled laboratory environment, seeks to answer a broad range of questions like if consumers of a product could stand to gain out of a mere announcement of a maximum retail price (MRP), or if labor unions can gain from the mere existence of a minimum wage law, even when none is binding. Similarly, the third chapter is on a field experiment that focuses on considerations that may prevent dictators (agents with complete bargaining power) from settling on their most preferred allocation. The final chapter analyzes the role of an arbitrator in the settlement
of bargaining outcomes and analyzes the requirements of the same to conclude that they are consistent with the fairness considerations in the spirit of Rabin (1993). The rest of this chapter provides a broad overview of each that follows.