This thesis examines the strategic incentives of market players under constrained situations that generate economic externalities. The first chapter considers a model of competition in which economic activity takes place through networks of bilateral interactions. Economic externalities in this...

The following is an outline of the four chapters of this dissertation. Chapter 1 shows that subgame perfect equilibrium and weak perfect Bayesian equilibrium require rationality at information sets that are irrelevant for determining whether outcomes are sustained by sequentially rational play....

This dissertation is comprised of three essays. The first essay tests the empirical validity of a statistical discrimination model that incorporates employer's race. I show that if an employer statistically discriminates less against an employee that shares the same race (match) than an employee...