Essays in Applied Microeconomics

This thesis consists of three essays. In the first essay we study monopolistic pricing, with a capacity constraint, of a good that loses its value T periods after it is put on sale for the first time. Buyers only obtain utility just before the good loses its value. Examples of such goods include airline tickets and hotel rooms. This essay presents a three-period model with a single seller facing a capacity constraint, where the good being sold loses its value after the third period. The seller offers a finite measure of units for sale in a market, where in each period a continuum of buyers, each of whom might be one of two types, enter. The seller chooses, without precommitment, price and measure of units to offer in each period. Each of the buyers chooses either to make a purchase as soon as they enter, or to wait for a lower price which might be made available in the future. This allows us to capture some features of airline ticket pricing. The equilibrium price path is obtained and found to be non-decreasing, U-shaped or horizontal forthe relevant range of parameter values. Any strategy involving `final sales' is found to be non-optimal.In the second essay we examine the voluntary provision of a public project via binary contributions when contributions may be made overmultiple rounds. In many situations, early contributors are likely to pay a higher cost than those who wait. We show that in suchcircumstances the provision of the project always involves delay. Since this game involves coordination on complex, dynamic strategiesin the face of asymmetries in payoffs, we examine behavior in the laboratory.In the third essay, we empirically test the theoretical predictions of the first essay. We collect airline price data from an onlinetravel agent for 30 routes in the US, each with a different proportion of business travellers. We find that while prices never fall before departure, the price path is rising for routes with low, medium and high proportion of business travellers and that the increase in prices is sharpest for routes with the highest proportion of business travellers.