| Summary: | This thesis collects three papers that study applied problems in economics dealing with dynamic strategic behavior and imperfect information. In the first chapter I study the relationship between participation in United Nations Human Rights Treaties (HRT), foreign aid receipts and domestic human rights institutions. I provide empirical evidence that countries with relatively high HRT participation rates receive more foreign aid. Further, countries with high quality institutions are more likely to participate in HRTs, but that high levels of HRT participation leads to a decline in the quality of domestic human rights institutions.
Based on these findings, I propose and estimate a dynamic game of HRT ratification. The estimates show that economic factors play an important role in HRT ratification and that the ratification costs countries incur vary significantly across treaties and country regime types. I use the estimated model to evaluate the effects of
counterfactual policies on HRT ratification decisions, human rights behavior, and the distribution of foreign
aid.
The second chapter considers environmental regulation under imperfect information and political constraints. We compare the value of two types of information to a
regulator: the cost of pollution and the profitability of
firms in the economy. We find that in environments where
small increases in the losses to regulated firms greatly affect the regulator's ability to implement the policy, it is most valuable to
learn the types of firms, while it is most valuable to learn the
cost of pollution when small increases in losses are relatively ineffectual.
The third chapter deals with the identification and estimation of dynamic games
when players maximize expected payoffs given beliefs about other players'
actions, but their beliefs may not be in equilibrium. First, we derive conditions for point-identification of structural parameters and players'
beliefs, and propose a simple two-step estimation method and
sequential generalization of the method that improves its asymptotic and
finite sample properties. We also present a procedure for testing the null
hypothesis of equilibrium beliefs. Finally, we illustrate our model and
methods with an application of a dynamic game of store location by
retail chains.
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