The dissertation includes two projects. The first one studies the product market segmentation and output collusion within substitutes; the second one examines the effects of WIC program and peers on breastfeeding activities. In Chapter I, we extend the differentiated product model, first developed by Bowley (1924), by relaxing the assumption that each firm produces only one differentiated product. By doing so, we are able to analyze the potential for collusive market segmentation in a two stage decision framework, first in product space and second in output. We find that when firms cannot coordinate on output, the required discount factor that supports collusive market segmentation is strictly decreasing in product substitutability and is greater than partial output and full collusion. Overall we find that output collusion alone is easier to sustain than collusive product market segmentation. In Chapter II, we first use duration analysis techniques to estimate the effects of WIC participation on breastfeeding activities using a nationwide data. Income ineligible participants are excluded from the sample. The models with and without peer effects variables are both estimated. We find that the prenatal WIC participation status does not have significant effect on breastfeeding activities. Peer effects have significant positive effects on both partial and exclusive breastfeeding durations but not on breastfeeding initiation. The magnitude of the peer effects on each individual is different and depends on the individual’s propensity to breastfeed. The results on peer effects based on the full sample are consistent with the findings from restricted sample. Knowing more than five peers who breastfed increases the probability of initiating by 3.7% and the likelihood of breastfeeding at months 3 and 6 by more than 15%. It also increases the partial and exclusive breastfeeding durations by 9 and 3 weeks, respectively. The results suggest the presence of a social multiplier in breastfeeding. Any exogenous change in breastfeeding behavior due to policy interventions would result in an even greater change due to the bidirectional influences within peer groups. Peer effects play a more important role for breastfeeding duration than initiation.