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Economics Student Conference 2017

2017
The Economics Student Conference is held annually each spring and gives the Department of Economics a chance to showcase the excellent research students are doing in a variety of fields covered in their coursework. The conference features both undergraduate and graduate student work. Students have an opportunity to present their papers to their peers and professors.

Read student abstracts from the following sessions:​

Labor Economics

  • The Effects of Extended Residence on Immigrants and Their Incomes in the U.S.  

    By: Markis Lopez and Nikita Lysov    
    The purpose of this study is to estimate the effects on total wages of immigrants (both citizens and non-citizens) of their length of stay in the United States. Despite controlling for many nominal income variables, our overall findings are that as immigrant’s length of stay is extended their wages stagnate and do not increase, but decrease over time. Even though immigrants are contributing to the economy by fulfilling STEM-related or low skill jobs, there has been little influence on the trend due to Mexican immigrants who represent almost 30% of minorities and suffer severe discrimination. 
  • How Do Certain Household Characteristics (Welfare, Race, Marital Status and Children) Affect the Head of the Households Employment Decision If They Are Not Highly Educated (HS/GED or lower)

    By: Alicja Pawlus and Jessie Bosshard
    The climate surrounding social welfare in the U.S. and abroad is a controversial topic. Economists, policy advisers, and individuals hold diverse opinions regarding whether governments should support more or less cash assistance and whether certain welfare components--such as food stamps and Medicaid--actually decrease motivation to work. We attempt to empirically understand the effects of certain welfare programs and household characteristics on job security. Similar to other research, we hypothesize that any kind of governmental financial assistance will negatively impact the employment status of an individual, because we view welfare as a support system, rather than an employment incentive.
  • Effects of Employee-sponsored Health Insurance on the Labor M​arket

    By: Josep M. Nadal Fernandez
    This paper examines the impact of employee-sponsored health insurance on wages and job mobility using the National Longitudinal Survey of Youth 1979 (NLSY79). The paper intends to shed light on the lack of empirical evidence due to identification problems by proposing a fixed-effect model. My specifications suggest that wages increase by 9% with employee-sponsored health insurance, though, the relationship becomes insignificant when instrumental variables are used. The paper further finds that tenure is longer for those with employee-sponsored health insurance similar to results of previous analyses. The results should not be seen as completely conclusive due to potential unobserved factors. More exhaustive analyses need to confirm these findings.
  • Moonlighting During the Financial Crisis

    By: Kyle Wahe
    The decision to take a second job, or to “moonlight,” can be explained by two underlying theories: constrained hours on the primary job and the desire for job heterogeneity. The large impact of the Great Recession on employment warrants consideration of whether or not moonlighting changed during and after this period. Using panel data from the 2008 Survey of Income and Participation, I estimate probit models to determine the incidence of moonlighting during the recession by gender. I find evidence that both genders moonlight as a result of primary-job constraints. In addition, there is evidence that moonlighting occurs more during the recessionary period for women.

Antitrust Regulations

  • United States v. Gannett Co., Inc., Belo Corp., and Sander Media LLC

    By: Michael Fernandez and Steve Miller
    This analysis addresses Gannett Co., Inc.’s acquisition of Belo Corp. in 2013. Specifically, we focus on the United States Department of Justice’s suit against Gannett, Belo, and Sander Media LLC regarding how Gannett’s market power was determined (including defining the relevant market), unilateral competitive effects theories in merger analysis, and understanding how the merger created barriers to entry in the relevant markets. We also examine how the pricing for certain offerings (advertising) would be affected by the acquisition, the coordinated interaction between Gannett and Sander (both implicit and explicit), the competitive effects of vertical integration, and the network effect across multiple markets.
  • United States vs. Lockheed Martin Corp. and Northrop Grumman Corp., (1998)

    By: Adam Maher and David Ziegelski
    This case study assesses the economics and business decision-making as it pertains to the antitrust case of the United States versus Lockheed Martin Corporation and Northrop Grumman Corporation.
  • U.S. v. Morgan Stanley

    By: Bhavisha Patel and William Pigott
    Our analysis of the United States vs. Morgan Stanley explores the antitrust suit brought against a financial company for its role in the creation of a financial product used in the manipulation of the energy market in the New York City area. While explicit collusion may not have occurred, the scenario created a situation in which a market was manipulated, with impacts both to the parties directly involved in the delivery of services and the financial services industry.
  • Anti-Competitive Behavior in the Organic Dairy Market

    By: David Yonk and Jonathan Profita
    Prior to the acquisition of WhiteWave by Danone, 83% of Raw Organic Milk was purchased by two unrelated entities, Horizon Organic (owned by White Wave) and CROPP. Horizon Organic currently purchases 44% of all organic raw milk where CROPP purchases 41% and Stonyfield (owned by Danone) is responsible for 40% of CROPP purchases. The post-acquisition firm will represent 60% of all Raw Organic Milk purchased in North America making it a powerful buyer. In addition to buyer power, the new firm will now own the #1 and #3 organic milk brands, the #1 organic yogurt brand in North America, and the #1 non-dairy milk substitute in North America. The monopoly power accumulated through this merger could lead to anti-competitive behavior both in the supplier-buyer arrangement as well as the retail end-user arrangement. This paper aims to define the market in which the newly created firm competes as well as the potential impact of the new firm on competition and consumer welfare. As this is an ongoing case, specific data sets are not always available to provide a robust economic analysis. In these cases, we look at the theoretical methods that could be applied to understand how supplier and consumer welfare is impacted by the creation of this new firm.​

Econometrics

  • The Determining Factors of Foreign Direct Investment in the United States

    By: Anna Bilinkis    
    Using an econometric model, this paper investigates the determining factors of foreign direct investment (FDI) in the United States from 1970 to 2014 using a sample of 45 annual observations. Using an empirical model with several macro-economic variables, we obtain a general characterization of FDI in the U.S. economy. According to the analysis, GDP, Inflation, Infrastructure_Transportation and Imports_ are significant suggesting that for the U.S. these four variables are the main factors in determining FDI. Thus, the conclusion offers several policy implications on how to improve the growth of these independent variables and as a result attract more FDI into the United States.
  • Gender and Poverty in Developing Countries: Insights from the 2004-2005 Household Income, Consumption, and Expenditure Survey

    By: Eric Henderlight and Alexander Shaindlin
    Approximately one-third of Ethiopian households sampled are headed by women. Using a multivariate OLS model with data from the 2004/5 Ethiopian Household Income, Consumption, and Expenditure Survey to control for the effects of several factors that influence poverty, we estimate the effects of the sex of household head on total annual expenditures. Many factors determinewhether female-headed households spend less annually than male-headed households. We find that households with women at the head are spending approximately 15% less than households led by their male counterparts. This research supports the concept of the ‘feminization of poverty’ in Ethiopia.
  • Analyzing Equity Investors’ Profiles and Risk Tendencies

    By: Michael Sherman
    At over 18 trillion dollars, the United States has the highest valuation of equities in the world. Thus, it is critical to analyze the risk profile of the investors that make up such a large market. By utilizing the March 2016 Current Population Survey, several logistical models were constructed. After running several simulations, it was concluded that a retired, wealthy, white male, born in the United States, was the most likely investor. It was also determined that participation in the stock market reflected discrimination against minorities. Certain groups had a more pronounced bias, while other groups faced minimal biases.​

Game Theory

  • Examining Donald Trump’s Presidential Campaign through the Applications of Game Theory

    By: Anand Aldarjav
    Much of America was puzzled and polarized by the candidacy and the campaign of businessman Donald Trump. This paper examines the Republican nominee’s bid for the 2016 presidential election, and the unique strategy behind his campaign. I attempt to explain his decisions through the applications of Game Theory concepts such as strategic interdependence, threats and signals, and tit-for-tat.
  • President Trump’s End Game

    By: Marcus Cirone
    This paper examines the strategic decisions that the Trump administration has made through a framework developed using game theory. The actions analyzed include President Trump’s efforts to increase the amount of NATO funding from European allies and his conflicts with media organizations. The individual strategic decisions are then analyzed using a game that explores President Trump’s actions in terms of the effect they have of challenging institutions that are fundamental to maintaining a democratic form of government. The paper ends with an explanation of how President Trump is able to continue to govern this way with the support of Republican members of Congress.
  • Norman Conquest

    By: Joseph Vitone
    The main topic of this paper is an analysis of the Norman invasion of England in 1066 AD. A game theoretic framework was used for the sake of this analysis, with an ultimate goal of creating a game theoretic model displaying all of the options the two primary participants in the invasion had available to them. Utilizing that model, conclusions were drawn using traditional game theoretic concepts (e.g. Subgame Perfect Nash Equilibrium). The strategic decisions analyzed in this paper include events preceding as well as during the Norman invasion of England.
  • Space Race Game Theory

    By: Aaron Pagel
    This paper examines the space race through the lens of game theory. The examination starts at the end of World War II and dissects the different players, incentives, and games within the Cold War that eventually led to an internationally cooperative space industry. I conclude with a general prediction for the future of that cooperation and how governments and private industry might respond to a space economy with a much lower barrier to entry. This paper also briefly examines evolutionary decisions that has cemented our current path for the foreseeable future despite the desire to change long-term goals.
  • The Russian Invasion of Crimea: A Game Theory Perspective

    By: Angela Jensen and Anna Bilinkis
    In 2014, amid political upheaval in the Ukraine, Russia annexed Ukraine's most strategically useful port: the Crimean peninsula. Ukraine had been trying to join the E.U. and Russia’s invasion took place against the backdrop of a tug-of-war between them and the E.U. for regional influence. Considering Russia’s 1999 invasion and annexation of Chechnya, it is worth asking: under what conditions might it happen again? And if Russia decides to expand its borders, what are the West’s options? Using game theory, this paper analyzes Russia’s past invasions and attempts to predict how they might behave moving forward.
  • Apple Inc. vs. Samsung Electronics Co.: A Lesson in Game Theory

    By: Michael Fernandez and David Egan
    This analysis addresses the somewhat paradoxical relationship between Apple Inc. and Samsung Electronics Co. In analyzing the strategic interdependence between these two companies, we have reviewed their use of dominant strategies, differentiation strategies, and the overall structure of the smartphone market from both a domestic and worldwide perspective. We also address the entrant/incumbent relationship of both companies as the smartphone market has evolved, including the creation of complementary goods and services. The culmination of this analysis addresses the “patent wars” that both companies are engaged in, which results in each being faced with an innovator’s dilemma.
  • The Economic Game Theory of Local Gasoline Sales

    By: Jeffrey Hemphill and Mike Goglia
    Game theory is the area of economics that facilitates the modeling of decision making by first considering how opponents will behave. This paper takes a closer look at competition within a local gasoline market through multiple classic game theory models, called “games”. The classic model applicable to competing gas stations and their proximity is called Hotelling’s game. This paper analyzes this approach as well as multiple frameworks of the Prisoner’s dilemma, entry deterrence, and Caveat Emptor in an effort to provide solutions and explanations to challenges faced with pricing, opening a new station, competing with other stations, and consumer behavior.
  • Microbrewery vs. Macrobrewery Wars: A Game Theory Analysis

    By: Nick Lyons and Quinn Skony
    The craft beer revolution that began in the early 1990’s has created shockwaves in a large market, pitting large industrial titans against small start-ups. The results have been quite intriguing, especially for beer enthusiasts. The mega market companies are struggling to sell an inferior product while the small microbreweries, with a superior product, are cooperating together to gain market share and market power. In this paper, we look at this ‘Beer War’ through a game theory lens to explain the recent mergers and acquisitions that have taken place over the past two decades.
  • UBER VS. LYFT: A Game Theory Analysis of Ride Sharing Services

    By: Nicholas Doerner and Mollie Stevens
    This paper examines the space race through the lens of game theory. The examinIn this paper we examine, through the lens of game theory, the fierce battle between Lyft and Uber drivers and pricing, the benefits and drawbacks to being the first to dive into a new market, the race to create the first autonomous vehicle for ride sharing, and the decisions behind each of these unfolding games in the ride sharing market.
  • The Costs and Benefits of Police Profiling From a Game Theoretic Lens

    By: Brendan Newell
    This paper looks at the main criticism of the proactive policing stop-and-frisk program-- the argument of racial bias in the implementation of this type of policing program.. I examine whether proactive policing is an economically efficient outcome through a game-theoretic lens. Moving forward, I look at the payoffs and reward structure of proactive policing, specifically regarding reducing costs to stop citizens and increasing payoff structures of proactively catching criminals. I examine New York Crime statistics and use a 2016 sample for the paper.​​

Markets & Policy

  • Rooftop Solar Economics in Chicago

    By: Joshua R. Dickey
    This proposal examines the economics of residential rooftop solar in the Chicagoland area. An overview of solar distributed generation and its importance to society is addressed. The two most important variables when assessing the economics of solar generation are location and net metering policy. Thus, location factors and current events in net metering policy are explored at length. A variety of data sources were analyzed from utility demand data to historical solar radiance and climate data. With this information we can derive a flexible model to ascertain the system capacity and time needed for a residential roof top solar array to be economical in the Chicagoland area with discounted cash flow modeling. To demonstrate the importance of location the model is also applied to Phoenix, Arizona. The analysis concludes by summarizing the optimal inputs an individual would need to receive a net benefit and a final recommendation based on the risks and opportunities. Future avenues and questions are explored for further empirical analysis in this working paper.
  • The Impact of Paid Parental Leave Policies on Income

    By: Sasha Pierson
    This exploratory paper evaluates the impact of access to paid parental leave on earnings for men and women using 2011 cross-sectional data from the National Longitudinal Survey of Youth 1997. Proponents of paid parental leave argue that it may help reduce the gender pay gap by increasing job tenure rates for women and therefore lifetime earnings. On the other hand, women may accept lower salaries if substantive parental leave benefits are offered by their employer. Currently, women are more likely to take unpaid leave or drop out of the workforce when any family caregiving obligations arise. Paid parental leave may also encourage more men to take caregiving leave, thereby reducing its associated stigma and closing the wage gap even further. The initial findings of this study reveal that the impact of leave policy on earnings differs based on gender. Access to paid parental leave policies was found to have a positive impact on earnings of young workers. Further information is needed to remove potential endogeneity concerns and a differences-in-differences examination of similar states with dissimilar paid leave policies may provide more insight into the effect of paid parental leave on earnings.
  • The Proposed Merger of Proctor & Gamble Company and Gillette

    By: Alexander Coologeorgen and Dan Ludovisi
    The Federal Trade Commission (FTC) investigated the merger between the Gillette Company by Proctor & Gamble and had reason to believe that it violated Section 7 of the Clayton Act. The result of the investigation was that the FTC found that the acquisition would likely result in less competition and tend toward a monopoly. The direct competition between the two respondents would be eliminated resulting in a reduced incentive to support competing product lines, increased ability to unilaterally raise prices, and reduced incentive to improve service. The conclusion was a decision to order divestiture of the APDO, Rembrandt, and SpinBrush products. We analyzed the FTC’s assessment of the relevant market and associated barriers to entry and evaluated the appropriateness of this market interpretation. We also assessed the reasoning that the market conditions would result in horizontal competition concerns leading to consumer harm through increased prices. Finally, we analyzed the decision for divesture and assess the validity of this decision to prevent the presumed harm from being imposed. Our general finding was that we agreed with the decision by the FTC to order the divestiture, and the fairness of this decision was evident by the compliance of the merging parties.​

History of Thought

  • Analysis of Stadial Histories

    By: Matt Palmere
    This paper is an analysis of several breakdowns of economic and social history into stages or stadial histories. The purpose for this analysis is to reveal the origins of much of our economic thought and where it is headed in the future.
  • Adam Smith’s Theory of International Trade: How Trade and Economic Growth Are Linked Through Division of Labor

    By: Magda Pecyna
    This paper describes Adam Smith’s theory of a dynamic relationship between the division of labor and trade. Two distinct, yet highly interrelated benefits of foreign trade include market-widening and vent-for-surplus. Smith’s concept of division of labor implies that countries will likely specialize in different industries. As a result, there will be surplus of certain products that cannot be sold domestically and that will have to be exported. As a consequence of opening up to trade, countries benefit from surplus productive capacity and absolute cost advantages.
  • Adam Smith and Jean Jacques Rousseau: Relationship Between Commercial Society and Government

    By: Katia Verela
    The purpose of this paper is to address the problems that arise from a commercial society— the divide between happiness and wealth, and defining what a natural state is. This is done by studying the writings of Adam Smith and Jean Jacques Rousseau, who both agree that a commercial society opens the door to inequality. Their disagreement comes from whether people are better off in a commercial society. It is concluded that Smith’s solution to the inequality is to use the tax revenues to help the poor while Rousseau would prefer to prevent inequality that is created by a commercial society.
  • The Neutral Rate of Interest and Financial Crises

    By: Sebastian Vermaas
    This paper analyzes the differing perspectives on the effectiveness of monetary policy in what has come to be known as a ‘liquidity trap’, a term often attributed to John Maynard Keynes to describe depressed economies wherein changes in the money supply fail to decrease interest rates and stimulate aggregate demand. To contrast these perspectives, this paper compares Keynes’ liquidity trap hypothesis with that of Ralph Hawtrey’s ‘credit deadlock’, a situation which can best be characterized by extreme entrepreneurial pessimism in which lenders and borrowers are afraid to transact. To understand how these perspectives differ, the paper begins with an analysis of the various theories on the rate of interest, and more precisely the concept of a natural or neutral rate. Whereas Keynes’ asserted that the rate of interest is determinate on a liquidity preference, Hawtrey maintained the contemporary viewpoint of his time that the rate is determined by the rate of time-preference. This paper offers differing remedies and mechanisms for combatting contractionary economies at the zero-lower-bound, and focuses primarily on those provided by Ralph Hawtrey, John Keynes, Alvin Hansen, and John Hicks. The paper concludes with introduction of the present-day secular stagnation hypothesis recently revived by Lawrence Summers.
  • Karl Marx and John Maynard Keynes and Modern Day Crises

    By: Luke Graczyk
    The world economy has gone through quite a lot in the past decade. While the policy that was implemented by the Federal Reserve Board saved the U.S. and much of the world from complete financial market collapse, much of their policy was far from perfect. Economists like Marx and Keynes have written large commentary on the idea of economic crises. This paper looks to examine them, along with modern understanding from other writers, to see how valid their ideas could be at preventing future crises and if they could have been effective in 2008.​

Behavorial Economics

  • A Behavioral Economics Take on Decision Making Across Various Cultures

    By: Luke Graczyk
    Culture has long been disregarded in the realm of neoclassical economic thought. It is something that has been difficult to quantify and defies the idea that all consumers are rational and the same. In behavioral economics, culture can be considered more fully and shown to have noticeable economic effect. This paper examines current research, presenting a new interpretation using a behavioral lens, and concludes that measurable differences do exist, most notably between Eastern and Western cultures as well as language. The paper also prompts this research to be continued to bolster the claim that culture has a noticeable effect on economic outcomes.
  • Apple: Less is More

    By: Anand Aldarjav
    This paper studies the history of Apple Inc., and its seemingly conscious choice to limit the customization of its products, and argues that the company employs behavioral economics findings on consumer biases in order to maximize profit. Unlike its competitors, Apple deliberately limits the variety of its products, as well as the degree to which consumers can customize them to avoid the “choice overload” phenomena consumers face. This ensures that they purchase its products without facing the “competence and comparative ignorance” scenario.
  • Marketing and Behavioral Economics

    By: Kinga Mamulska
    Consumer behavior documented in the marketing literature often demonstrates unusual or unexpected human choices. Some behavioral economists have explored ways in which to best explain these behaviors. In this paper, I look at some of the current behavioral economics concepts that may help explain consumer behavior. I also explore different marketing results and try to explain the outcomes and observations using concepts from behavioral economics.
  • The Role of Emotions and Visceral Factors in Cigarette Consumption and Addiction: A Behavioral Economic Analysis

    By: Julian Castro
    In the past, cigarette advertisements targeted the emotions and visceral factors of consumers to increase demand for cigarettes. Traditional economic models of human behavior do not include emotions and view the consumer as a rational person whose decisions express his proper self-interest. This paper shows why visceral factors cause people to behave against their self-interest and become addicted to cigarettes. Lastly, the effectiveness of current anti-smoking ads targeting the youth are examined and shown not to be effective.​

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