This dissertation consists of three essays on optimal efforts, costs and rewards.

The first essay is an application of the concept of Markov Perfect Nash Equilibrium to the most popular sport in the world – soccer. This essay confirms that the notion of Nash Equilibrium is applicable while analyzing sporting activities, which are played under a strict set of rules and where payoffs are observable. Using a game theoretical model and simulation techniques, I am able to prove that the probability of observing a goal goes up as the game progresses, given that the game is tied.

The second and third essays are in the area of Labor Economics. I try to explain the increasing trend in consumption of leisure in the United States over the last 5 decades by distinguishing between Active and Passive forms of leisure. I build a theoretical model, which is used to derive comparative statics that help us in identifying the effect of health on consumption of different types of leisure. This paper uses the American Time Use Survey to test the observable implications of the theoretical model.

The third essay is on the minimum wage debate. I use a contiguous counties dataset to analyze the effect of minimum wage changes on employment, earnings per worker and the wage bill. A difference in differences approach is used and results show that the supply of labor at the lower tail of the skill distribution may be elastic.