Essays in Industrial Organization

This dissertation extends the empirical industrial organization literature with two essays on strategic decisions of firms in imperfectly competitive markets and one essay on how inertia in consumer choice can result in significant welfare losses. Using data from the airline industry I study a well-known puzzle in the literature whereby incumbent firms decrease fares when Southwest Airlines emerges as a potential entrant, but is not (yet) competing directly. In the first essay I describe this so-called Southwest Effect and use reduced-form analysis to offer possible explanations for why firms may choose to forgo profits today rather than wait until Southwest operates the route. The analysis suggests that incumbent firms are attempting to signal to Southwest that entry is unprofitable so as to deter its entry. The second essay develops this theme by extending a classic model from the IO literature, limit pricing, to a dynamic setting. Calibrations indicate the price cuts observed in the data can be captured by a dynamic limit pricing model. The third essay looks at another concentrated industry, mobile telecoms, and studies how inertia in choice (be it inattention or switching costs) can lead to consumers being on poorly matched cellphone plans and how a simple policy proposal can have a considerable effect on welfare.

A Search for a New Particle Decaying to Pairs of Weak Gauge Bosons with the ATLAS Detector

A search for new heavy resonances decaying to boson pairs (WZ, WW or ZZ) using 20.3 inverse femtobarns of proton-proton collision data at a center of mass energy of 8 TeV is presented. The data were recorded by the ATLAS detector at the Large Hadron Collider (LHC) in 2012. The analysis combines several search channels with the leptonic, semi-leptonic and fully hadronic final states. The diboson invariant mass spectrum is studied for local excesses above the Standard Model background prediction, and no significant excess is observed for the combined analysis. 95$\%$ confidence limits are set on the cross section times branching ratios for three signal models: an extended gauge model with a heavy W boson, a bulk Randall-Sundrum model with a spin-2 graviton, and a simplified model with a heavy vector triplet. Among the individual search channels, the fully-hadronic channel is predominantly presented where boson tagging technique and jet substructure cuts are used. Local excesses are found in the dijet mass distribution around 2 TeV, leading to a global significance of 2.5 standard deviations. This deviation from the Standard Model prediction results in many theory explanations, and the possibilities could be further explored using the LHC Run 2 data.