Date of Award
12-11-2024
Degree Name
Doctor of Philosophy (PhD)
Degree Type
Dissertation
Abstract
This dissertation consists of three theoretical analyses. In the first chapter "Who Takes Responsibility and Preventive Action? Centralized vs. Decentralized Risk Management in an Organization with Heterogeneous Agents," we investigate the optimal allocation of risk management responsibilities in organizations with multiple agents possessing heterogeneous preventive action costs. Extending the principal-agent framework to a multi-agent context, we analyze how a manager and agents choose preventive efforts to mitigate risks. Two scenarios are considered: (1) centralized risk management, where the manager bears all expected damages, and (2) decentralized risk management, where agents bear their own damages. Our findings show that centralized risk management often results in higher social welfare and is preferred by the manager when high-ability agents are present. Conversely, decentralized management becomes favorable when agents lack the ability to prevent risks effectively. This study contributes to organizational design by highlighting how agent heterogeneity influences risk responsibility allocation. In the second chapter "Dynamics of Internal Promotion and External Recruitment" (joint with Tomoya Tajika), we present a model describing an internal promotion race among individuals in different sectors where power shifts over time. The model includes a ratchet effect in which an employee attempts to manipulate their post-promotion reputation as a manager before they are promoted. The magnitude of this effect and the internal promotion rule are determined by beliefs about the job's difficulty, which is updated over time, and potential subordinates' cooperation. We use a dynamic model to compare internal promotion policies with external recruitment. We demonstrate that committing to internal promotion can provide more long-term profits than a mixture of internal and external recruitment. In the last chapter "Government Comparison: Utilitarian vs. Growth Maximizer in a simple Endogenous Growth Model with Limited Prediction Ability," we analyze the relationship between government policies, economic growth, and household welfare using a simple endogenous growth model. We examine how different types of governments - utilitarian and growth maximizer - can affect household welfare while also considering the government's prediction ability. Specifically, we investigate whether a growth maximizer government can better serve households by increasing economic growth. Our results suggest that for a certain range of prediction ability, a growth maximizer government may be better for households than a utilitarian government. This is because a utilitarian government may hesitate to invest in productivity, but when the government tries to maximize the growth rate, the amount of investment becomes large enough to have a positive impact on household welfare. By exploring these relationships, this paper contributes to our understanding of the role of government policies in promoting economic growth and improving household welfare.
Language
English (en)
Chair and Committee
Bumin Yenmez
Committee Members
Bumin Yenmez; Marcus Berliant; Mariagiovanna Baccara; Ping Wang; Sangmok Lee
Recommended Citation
YAMAGATA, Kohei, "Essays in Economic Theory" (2024). Arts & Sciences Electronic Theses and Dissertations. 3379.
https://openscholarship.wustl.edu/art_sci_etds/3379