Essays in Microeconomics: Can Unions Be Barriers to Entry?; Estimating Elasticity of Demand for Goods Priced By Time of Day; Ramsey Optimal Price and Capacity with Uncertainty (Utilities, Main Frames, Monopoly, Peak-Load, Computers).

Abstract

The first essay examines the possibility of a labor union and a dominant firm tacitly colluding to damage rivals through industry wide, high wage contracts. In essence, the dominant firm grants the union higher wages in return for actions by the union to raise the labor cost of rivals. The second essay proposes a simple quadratic model of the individual computer user. The user chooses both a consumption pattern and a level of consumption to maximize utility. The model allows for corner solutions and yields a tractable procedure for the estimation of demand elasticities. The third essay has four goals. First, to discuss Ramsey pricing rules when capacity is jointly chosen with prices. Second, to simplify the discussion of capacity choice by proposing an indirect utility function which incorporates capacity. Third, to examine the restrictions aggregation places on the form of the proposed indirect utility function. Fourth, to examine the impact of shifts in risk on optimal price and capacity.