Essays in Applied Microeconomics

Each of the following five essays that constitutes the present dissertation contributes to our understanding of various micro- and macroeconomic phenomena, using the tools of microeconomic theory as well as econometrics. Four of the essays are in the applied theory, while one is in the empirical tradition of applied economics. The first essay is concerned with the phenomenon of invormation avoidance. Several studies suggest that consumers do not always value more information about the product, and they sometimes even try to avoid receiving new information. This might be due to self-image or social image concerns. However, little has been said in the literature on how such tendencies manifest themselves in a market equilibrium and what types of incentives might influence the resulting equilibrium. The essay shows that information-avoidance can occur in equilibrium, but market incentives (in particular, a higher product price) can lead to more information acquisition and accordingly better product quality. Another new result in the essay is that the possibility of suing firms for misinformation (even in cases where fraud is not present in the traditional sense, such as in homeopathic medicine) further increases consumers’ incentive to get informed and accordingly can have a positive effect on product quality. Finally, ex ante regulation can „save” the consumer from both misinformation and „disappointment” but can lead to higher price if the firm has market power, so its effect on consumer welfare is at least ambiguous. The second essay studies the effect of the exit of Uber from the Budapest market ont he use of MOL Bubi, Budapest’s bicycle sharing network. The essay comes to the perhaps surprising conclusion that the exit of Uber depressed BSS use among regular users (but, on the other hand, increased usage among ad hoc users). A possible conclusion is that users increasingly use bicycle sharing systems as part of a „multimodal” way of transportation. The third essay sketches a model of parental investments in ...