| This dissertation consists of two chapters on behavioral economics.;Chapter one analyzes mutual fund flows from 1999 to 2012 to provide evidence that financial advisers exploit their clients' extrapolative beliefs to sell funds that pay high commissions. Utilizing comparisons between twin retail mutual fund share classes that differ only in commissions, I find a strong positive correlation between commission levels and return chasing. Fund flows from high commission shares show increased purchases of past winners, but no increased redemptions of past losers. This pattern is consistent with the incentives from 12b-1 commissions, which pay advisers to keep clients invested in high commission funds, but is hard to reconcile with alternative explanations such as advisers reducing search costs for quality funds, or return chasers self-selecting into high commission advisers. My findings support the SEC's recent efforts at restructuring 12b-1 commissions, as well as the White House's recent push to require fiduciary duty from all retirement advisers.;Chapter two attempts to isolate the effects of violent video game sales on crime using a novel data set of state-level game sales from 2006 to 2010. The panel database, constructed using NPD group publications and state-level sales weights computed from Google Trends search data, overcomes the time-series data restrictions faced by previous works. However, the state-level variation in this panel data was not enough to disentangle the impact of game sales from time trends because video game sales are highly correlated across states. I document the methodology used to reconstruct the panel data using Google Trends, as this could prove useful in other situations where panel data is difficult or expensive to obtain. |
