Essays on international trade and industrial organization

A nation's access to foreign markets and the quality of its institutions jointly determine its economic development. In the first chapter, I investigate the interaction between international trade and national institutional development, where institutions serve to mitigate moral hazard. In particular, I assume that managers in countries with more developed institutions are better able to monitor their employees. I focus on the impact of institutional differences on the pattern of trade and the effect of trade liberalization on the intra- and international distributions of education and human capital.; I consider a two-country, two-industry model. To focus attention on the role of differences in institutional quality, I assume that the two countries are identical except one has better-developed institutions. The two industries---denoted industries X and Y---differ in that individual productive effort is observable and verifiable only in the Y sector. In the X sector managers must monitor employees to determine individual contributions.; I assume that better trained managers are better able to monitor their employees. I also assume that managers in countries with more developed institutions are better able to monitor their employees: managerial training and national institutions mitigate moral hazard. Under these assumptions institutional quality plays a larger role in the X sector than in the Y sector. In fact, human capital also plays a larger role in the X sector than in the Y sector. In both sectors training facilitates the exertion of effort; however, only in the X sector does training also improve management's ability to alleviate moral hazard. Finally, agents are heterogeneous in their abilities. Each individual chooses her education level, the industry in which she works, and the amount of effort she exerts.; Liberalized trade allows institutions to serve as independent sources of comparative advantage. Not surprisingly, the country with superior institutions exports good X. I find that institutional-quality induced international specialization has important consequences for within- and across-country comparisons of income and education. This pattern of specialization impacts the incentive to accumulate human capital: the citizens of countries specializing in the institutionally-sensitive industry will choose to receive more education than equally able and advantaged citizens of countries with less developed institutions.; The second and third chapters examine spatial competition with arbitrarily many heterogeneous firms. Product characteristics are typically taken as given when economists study pricing strategies and firm behavior more generally. Nevertheless, firms choose the features of their products. The assumption that they don't is clearly not innocuous. In these two chapters I consider the determinants of firms' choices of product characteristics. In particular, I focus on the role of productivity differences in shaping these choices.; Firms are asymmetric in that they differ in their marginal costs. In each chapter, I model a two-stage game of complete information. In the first stage firms choose their locations in either geographic space or product characteristic space. In the second stage firms choose their prices. The two chapters differ in the manner in which firms compete in prices in the second stage and the identity of the agent that incurs the cost of transportation.; In chapter two, firms set mill prices: such a firm charges one price to all consumers and consumers pay the cost of transportation. This framework is very similar to the Hotelling model and is well suited for modeling a firm's choice of product attributes or its choice of geographic location. In chapter three, firms spatially price discriminate: such a firm chooses a price schedule that lists the prices that the firm charges consumers at each location in space. In this framework the identity of the party that bears the cost of transportatio...