University of Pennsylvania ScholarlyCommons Publicly Accessible Penn Dissertations 2017 Essays In Industrial Organization And Applied Microeconomics Peichun Wang University of Pennsylvania,
[email protected] Follow this and additional works at: https://repository.upenn.edu/edissertations Part of the Economics Commons Recommended Citation Wang, Peichun, "Essays In Industrial Organization And Applied Microeconomics" (2017). Publicly Accessible Penn Dissertations. 2629. https://repository.upenn.edu/edissertations/2629 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/edissertations/2629 For more information, please contact
[email protected]. Essays In Industrial Organization And Applied Microeconomics Abstract This dissertation consists of three essays in the areas of Industrial Organization and Applied Microeconomics. The first essay studies high-tech firms' product portfolio choices under competition. I develop a model of dynamic portfolio adjustments in the context of the Chinese smartphone market, using the product life cycle as an empirically tractable heuristic to capture firms' dynamic incentives in new product introductions. I first show that product life cycles endogenously arise in markets with rapid technological innovations, are heterogeneous across products, and are affected by the level of market competition. I then estimate smartphone demand and manufacturers' variable, maintenance and sunk introduction costs on a detailed monthly market-level dataset of Chinese smartphones between 2009 and 2014. Finally, I use a 2012 large-scale pro-competitive policy introduced by the Chinese government as an experiment to decompose the handset manufacturers' incentives to introduce new products and show that the increased competition reduces the average product's short-run profits yb 5% but its lifetime profits yb 41% by shrinking its product life cycle.