UMUT MERT DUR, Applicant for the Ph.D.

Program in Economics, Fall 2008

STATEMENT OF PURPOSE Page:1/2

“To give anything less than your best is to sacrifice the gift”
Steve Prefontaine
Being the youngest brother of two economists and an econometrician gave me the chance to
get acquainted with Begg, Varian and Mankiw at high school. Later, reading them just for fun,
turned into a desire to understand the principles of economics. I realized that, I was endowed
with capability of good understanding of economics. The quotation of Prefontaine, one of most
esteemed American distance runners, explains my motivation well for pursuing an academic
career in economics. After my analytical and mathematics oriented education, I believe that
becoming an academician in economics, specialized in industrial organization and game
theory, would be a good way to utilize my talents.
My educational background has a crucial role in gaining quantitative and mathematical skills.
The high school I attended, Izmir Science High School, is one of the most prestigious high
schools in Turkey. It is the top school in mathematics education which accepts Turkey’s top
100 students annually. I graduated as top 2nd ranked student with a GPA of 5.00/5.00, in 2001.
In 2001, I ranked 20th in National University Entrance Exam (OSS) where over 1.5 million
high school graduates took part. With such a high score, I was able to choose any university
and the department. I chose to study Industrial Engineering (IE) to gain high mathematical and
analytical skills. Undergraduate curriculum in the IE Dept. of Bogazici University, which
inherits the values of Robert College- the first American college founded outside the USA, is
an ABET (Accreditation Board for Engineering and Technology) certified equivalent program.
IE Dept. has highly competitive environment and strict grading policy. I graduated with a GPA
of 3.31/4.00 and a place in the Honors List in 2006. My undergraduate education in the IE
Department equipped me with a solid understanding of optimization, stochastic processes,
mathematical modeling, simulation, computer programming and decision sciences.
During my studies in IE, I was interested in the theory of economics. For this reason, I have
taken 8 courses from the Economics Dept. My GPA in these economics courses was 3.70/4.00.
Moreover, in my junior year I wrote 2 articles that were edited by the faculty members of the
Economics Dept. and published in the journal of the Economics Students Club at Bogazici.
To become fully equipped for a high-caliber PhD in economics, I enrolled Master’s program in
Economics in Bogazici University. Following my undergraduate success and score on a highly
technical entrance exam, I was also awarded a teaching/research assistantship. In our
program’s first year, I advanced my theoretical awareness through seven required courses
covering mathematical economics, microeconomics, macroeconomics and econometrics which
utilized PhD level textbooks, including Mas-Colell, Whinston and Green’s Microeconomic
Theory, Romer’s Advanced Macroeconomics, Ljungqvist and Sargent’s Recursive
Macroeconomic Theory, Johnston and Dinardo’s Econometric Methods and Greene’s
Econometric Analysis. I have completed the first year of the M.A. program with the highest
GPA among the 25 students. I was also honored with the Prof. Murat Sertel High Achievement
Award. Having a GPA of 3.79/4.00 in mathematics courses I have taken so far, this year, I
attend to Real Analysis to enhance my mathematical skill.
Being interested in the industrial organization and game theory, I’m currently working on an
article titled "Unravelling in Matching Markets: The Effects of Similarity of Preferences" for
my master thesis. Supervised by Prof. Mumcu, I aim to further investigate the role of the
similarity of preferences on unravelling in two-sided matching markets. Halaburda (2007)1
investigates the effect of similarity of preferences when workers' rankings over firms are
identical, while the firms' rankings (preferences) over workers can be identical or independent.
She concludes that, unravelling can not be observed if the firms' rankings over workers are
independent and unravelling becomes more likely as firms' rankings over workers grow more
similar. My paper builds upon Halaburda (2007) by introducing two important aspects. Firstly,

1
See Halaburda, "Unravelling in Two-Sided Matching Markets and Similarity of Preferences", 2007.
UMUT MERT DUR, Applicant for the Ph.D. Program in Economics, Fall 2008
STATEMENT OF PURPOSE Page:2/2

in my model workers' rankings are not restricted to be identical. I allow both sides of the
market to have rankings over other side which can be identical or independent. Moreover, in
addition to ex-ante uncertainty over full rankings of both the firms and the workers, I also
introduce ex-ante uncertainty over the length of firms' ranking lists. In other words, over time
firms may find some workers unacceptable even though they were considered acceptable ex-
ante. These two points are introduced to capture more realistic issues, like possibility of
workers having different values about firms and firms not finding some workers worth hiring
when the uncertainty about the workers dissolved. So far, I have studied the first two of the
four extreme cases, namely, (1) workers' and firms' ranking are identical, (2) workers' rankings
are identical, firms' rankings are independent, (3) workers' rankings are independent, firms'
rankings are identical, (4) workers' and firms' ranking are independent. Like Halaburda, I found
that unravelling becomes more likely as firms' rankings over workers grow more similar.
However, my preliminary results indicate that unravelling can also be observed when the
rankings are independent which means, similarity can not be the only key factor of unravelling.
I also work on a project with Prof. Erus on franchise contracts and exclusive territories titled;
“Nondiscrimination as a device for self-committing for exclusive territories” as a coauthor. In
particular we analyze commitment of upstream firm to exclusive territories in a market
consisting of one monopolist upstream and many oligopolist downstreams. Upstream firm can
not commit to exclusive territories, unless it uses nondiscriminatory pricing policy. However,
as it was shown by McAfee and Schwartz (1994)2 upstream may be unable to commit to
nondiscriminatory pricing in some cases. We are analyzing strategic issues involved
downstream location when upstream can not commit to exclusive territories. The model also
analyzes endogenous determination of optimum number of downstream firms.
In my first year in master, I worked as a Research Assistant for Prof. Aysan and Prof. Yildiran.
I contributed to an article titled “Regulations and Competition in Credit Card Market in
Turkey” which will be published in a Turkish journal titled ‘Journal of Economy, Business and
Finance’. This study analyzes the structure of the Turkish credit card market and explains the
reasons behind the high level of credit card interest rates. I was mainly responsible for the
literature review of this article.
During my studies I also had a chance to experience teaching as a Teaching Assistant. This
year, I am the teaching assistant of Master level Microeconomics course. The course covers
theory of the consumer, welfare, theory of the firm, theory of the market, and general
equilibrium theory at an advanced level.My duties include designing materials to be covered in
problem sessions, to teach in problem sessions, to grad exams and projects. In my senior year
of undergraduate, I volunteered to be the teaching assistant of Managerial Economics. During
my first year in graduate education, I was appointed as the teaching assistant of Introduction to
Microeconomics and Macroeconomics, Intermediate Microeconomics, Game Theory.
I think that my educational background and high technical-capacity provide me high command
in all areas of economic theory. Among those, I am currently working on game theory and
industrial organization. In the future I intend to continue my research on these subjects. In
order to reach my ultimate goal of becoming a diligent researcher and academician in
economics, I seek an academic institution strong in both theory and empirical investigation.
University of Pennsylvania not only fulfills my professional goals, but also provides a wealth
of opportunities to conduct research with pre-eminent scholars of world-renown. Given the
opportunity work with its scholars, my determination and enthusiasm will allow me to pursue a
career as a distinct scholar and educator in economics. My perfect education, both in Industrial
Engineering and Economics, in combination with my productive research experiences,
distinguishes me as an ideal match for the PhD program offered at University of Pennsylvania
and I welcome the chance to continue my rigorous training at your distinguished institution.

2
See McAfee and Schwartz, “Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Excluvity,
and Uniformity”, American Economic Review,1994