In this thesis we study the problem of how to effectively manage and operate a market that attracts trading agents to compete for resources in it. In order to attract more agents to the market, the market needs to have incentive policies. We are particularly interested in the research of the incentive matching policy. We propose a new matching policy with loyalty incentive features. In order to cooperate and improve its performance, we also propose a new accepting policy to work with the matching policy. We use the CAT platform as our test-bed. We describe all the policies and techniques used in the CAT competition in detail. In addition we carry out experiments which further support our proposal.

In this thesis we study the problem of how to effectively manage and operate a market that attracts trading agents to compete for resources in it. In order to attract more agents to the market, the market needs to have incentive policies. We are particularly interested in the research of the incentive matching policy. We propose a new matching policy with loyalty incentive features. In order to cooperate and improve its performance, we also propose a new accepting policy to work with the matching policy. We use the CAT platform as our test-bed. We describe all the policies and techniques used in the CAT competition in detail. In addition we carry out experiments which further support our proposal.

This dissertation contains two essays on the aggressive behavior of corporations in product market competition. In the first essay, I investigate how market structure can impact a firm's risk of facing predation by rivals, and hence, its financial policy decisions. Using a simple model, I demonstrate that a firm faces a greater predation threat when it meets the same competitor in many markets, as this competitor is able to internalize more of the benefit, degrading the firm's ability to compete in the future through aggressive actions today. I then test the predictions of the model using 2003-2011 panel data on store location across retail store chains in the US. I find that firms tend to expand more aggressively in markets shared with a competitor experiencing a substantial increase in leverage, or a decline in a credit rating, when they face that competitor in more of the other markets. The expansion relationship was found to be stronger in data from the 2008-2009 financial crisis, a period when difficulty in rolling over or obtaining new debt made it especially hard for weak firms to absorb losses. I also show that a firm facing the same competitors in many markets choose lower levels of leverage and that it decreases that leverage when a merger in the industry increases the amount of competitive overlap it has with other firms. These results suggest that firms are aware of the predation risk due to a competitive overlap and select financial policies to minimize this risk. In the second essay, I study the impact of internally generated funds on product market competition. More specifically, I investigate the idea that firms compete aggressively when their competitors face cash flow shortfalls. Testing this idea is challenging because competitor's cash flow changes are potentially endogenous with respect to firm's behavior. I address this problem in three ways. First, I investigate firm's reaction in a given market when its competitors face cash flow shortfalls outside of that market; this analysis is conducted using store location data on retail store chains. Second, I focus on the 2008-2009 financial crisis period in which retail store chains were hit by a negative demand shock which was hardly expected ex ante. Finally, I use a shock to local economic conditions which varies across markets and the different distributions of store locations across firms as instruments for the changes in competitors' cash flows. I find that a firm expands more in a given market in which it competes with rivals which face a more negative cash flow shortfall in the other markets. This relation is stronger when the competitors were highly leveraged before the crisis. Finally, I illustrate evidence that a firm responds more aggressively to competitor's cash flow shortfalls if it competes with that competitor in many of the same markets; this result is consistent with the prediction of the model in Chapter 1. These essays contribute to the literature by adding new evidence on the predatory behavior of corporations in product market competition. / text

Financial and industrial economists are increasingly recognising the interaction between capital structure and firms' strategies in the product market. A debate exists regarding the nature of the relationship between firms' product market power and financial leverage. Particularly, researchers have asked whether the relationship is positive, negative or non-linear. This thesis contributes to this research agenda by developing game-theoretic models, and conducting empirical tests. Specifically, the thesis examines the effects of market power on a firm's use of long-term debt.

For decades, economic theories have been mostly based on rational choices made by selfish individuals to maximize their utility, while sociology spent a lot of efforts describing the environment of individuals and explaining how this environment shapes theirs decisions. However, the last thirty years have seen many sociological concepts appear in the economic literature. For example, behavioral economics introduces things such as envy or altruism in economic theories. Other notions such as social capital, social norms, trust or community became more and more present in economic papers. The objective of this new strand of literature is to engage into sort of socioeconomic approach and to shed some light on interpersonal relationships. This thesis belongs to this socioeconomic approach, and tries to explore new aspects of various concepts. The two first papers are theoretical. In the first one, we explore the negative side of social capital, which has not been studied extensively, by investigating the effect of a norm on consumers when moving is costly. In the second one, we introduce a sociological concept, namely social identity, in a classic economic model in order to show how social interactions modifies its results, and hence, the importance of taking such interpersonal relationships into account. The third and final paper is an empirical case study of social capital in Belgium, an exercise that has not been done before, with the objective of comparing the level of social capital between the various regions of the country. In the first paper, The Tyranny of Social Norms on Individual Behavior, we study the negative effect of the existence of a norm and moving cost inside a community. Because of deviation cost (such as social shame or peer pressure for example), consumers inside a given community may not reach their ideal consumption, that is the consumption they would have without social constraint. On the other hand, moving to another community may be too expensive (in terms of social assets needed to be part of the new community). Hence, agents may get stuck in their community, being forced to consume something they do not want to. One example of such behavior is the underinvestment in education in some neighborhood. We show that such equilibria are possible and that they may be socially suboptimal equilibria as well as Pareto inferior equilibria. We also show that state intervention can correct those “bad” equilibria by operating transfers between agents in order to lower the moving cost. In the second paper, Social Identity, Advertising and Market Competition, we use a particular approach of a sociological concept, namely Social Identity, which focuses on the fact that people want to signal who they are to others. We assume that this is done by choosing a specific consumption (think of fashion market for example). We show that under this assumption, the classical result of Bertrand Price Competition does not hold anymore, and that prices and profits are positive, meaning that social identity creates market power for firms. Moreover, if the number of goods is limited, groups will be formed, and there will be multiple equilibria, each one corresponding to a particular partition of the consumers. We then add the possibility for firms to use advertising. This allows consumers to have a coordination tool, but increases also market powers for firms. We investigate the various equilibria that arise and their impact in term of welfare. In the third paper, Social Capital in Belgium, we construct an index of social capital using the European Social Survey, and we show that this index can be decomposed in three aspects: Trust, Social Activities and Social Network. We then study whether there is a difference in social capital between Belgium’s regions or not. We show that indeed, such difference exists, even when controlling for socioeconomic variables. In a third part, we investigate whether the level of social capital is higher or lower in Belgium than in other European countries, and we analyze European regional differences in term of social capital.

This year (2002), Taiwan participates in WTO under the worldwide economic depression. Besides facing the worldly market competition, Taiwan competes with the cheap labor force pressure from mainland China. In the meanwhile, Taiwan is at the transitional point of economic organization. K company is an over thirty-year overseas branch of an international Japanese Industry. How should it work out new management strategies for liquid crystal industry to promote its competition at this moment? Liquid crystal industry has developed for ten years. It has had one Crystal Cycle every three year. Under the economic depression, the demands of the worldwide PC market and information products have been decreasing. The price of panels has been going down. Factories have suffered heavy loss. Thus, how to work out management strategies for products to avoid virulent competition and to promote profitable competence is the most important issue for the managers of economic industry. This report research on K company¡¦s creative management strategies for liquid crystal. They include (1) Core Strategy (2) Strategic Resources (3) Customer Interface (4) Value Network (5) Customerization Goods Strategy. By industrial analysis and by management strategic analysis of Taiwan crystal industry, the report applies the organization analysis and research on business model, and then synthesizes K company¡¦s whole creative management strategies for liquid crystal industry. Key Words: liquid crystal, market competition, management strategy, customization goods

This dissertation addresses issues in corporate risk management. Part I examines the determinants for corporate decisions to commodity hedge and to the extent of hedging. Chapter 1 discusses prior literature, including theory and empirical evidence on corporate risk management. It provides the background to support the empirical analyses of Chapters 2, 3 and 4. Chapter 2 examines corporate decisions to commodity hedge. I find that firms are more likely to hedge when they are big, have risk management department set up and have more of their competitors hedge. Chapter 3 investigates what determines the extent of hedging conditional on hedging decisions and the cross-sectional and time series deviation of the hedge ratio. I find that firms tend to hedge less when they have younger CEOs and have more options in their compensation plan. I also find that when determining the hedge ratio, firms with young CEOs and higher option compensation tend to respond to past commodity price growth and to deviate from industry average. Part II investigates the relationship between corporate risk management and product market competition. Chapter 4 examines the different product market performance for firms with different hedging polices after commodity price shocks. I find that unhedged firms which are ex ante financially constrained lose market share and experience a decreased profitability during and after commodity price shocks. Chapter 5 examines whether the loss of unhedged constrained firms in product market is driven by the competitors. I find that firms with financial advantages—unconstrained hedged firms—tend to increase advertising expenditures and decrease price-cost-margins during negative commodity shocks, indicating that the market share loss of constrained unhedged firms is due to increased competition in the product market. Chapter 6 examines whether corporate risk management affects the likelihood of firms exiting the market. I find that constrained unhedged firms are 6% more likely to exit the market than their unconstrained hedged rivals and the effects are stronger in concentrated industries and industries with higher leverage dispersion. / text

This thesis investigates the relationship between product market competition and zero leverage behavior within firms, aiming to uncover how these dynamics interact. Additionally, it explores whether firms characterized by higher earnings volatility exhibit a more pronounced positive relationship between product market competition and the likelihood of adopting a zero-leverage strategy. To carry out this investigation, we employed product market competition data (Fluidity) from the Hoberg-Phillips Data Library and financial data from the Compustat (North America) database, spanning from 1989 to 2019. As product market competition intensifies, the probability of firms adopting a zero leverage policy increases. Furthermore, our research illuminates that the positive impact of heightened product market competition on the likelihood of zero leverage policies is accentuated in firms characterized by elevated levels of earnings volatility. This finding corroborates our initial hypothesis, substantiating the notion that increased competition significantly influences a company's earnings volatility. We also strengthened our analysis with insights from existing literature, underscoring how heightened earnings volatility intensifies the propensity to embrace a zero leverage policy. This study contributes insights to the literature, notably as the first to employ the interaction term between product market competition and earnings volatility in exploring these financial dynamics.

Economic theory and empirical research suggests product market competition can result in both positive and negative capital market effects. Specifically, research suggests competition reduces agency costs, but also reduces profitability. I examine the relation between product market competition and firm value in an international setting, focusing on how the relation varies with firm- and country-specific characteristics. I document lower values for firms in more competitive industries. However, the negative relation between competition and firm value is less pronounced for firms with higher firm-level liquidation risk, stronger country-level investor protection mechanisms, and higher firm-level transparency. These findings are consistent with an agency cost benefit resulting from product market competition. / Ph. D.

[pt] Frequent flyer programs (FFPs) - programas de viajantes freqüentes, mais conhecidos como programas de milhagem - é um indutor de lealdade do consumidor. Ao premiar o cliente por acumular compras na companhia de forma não-linear, estes podem alterar a intensidade da competição no mercado. Estudos empíricos passados já tentaram estimar os efeitos dos FFPs nos preços. Entretando, a maioria focou em fazê-lo via dominância do aeroporto, aliança e outros. O objetivo deste trabalho é investigar o impacto da fatia de consumidores capturados nos preços correntes, causados pela introdução de custos artificiais de troca no mercado. A forma reduzida estimada sugere uma correlação de aproximadamente 13% entre preços correntes e a variável construída que representa um índice de fidelidade passado. O resultado é robusto a estimativas adicionais. / [en] Frequent flyer program is a type of consumer loyalty program. By rewarding consumer in a non-linear way for accumulating purchases, it may alter the intensity of price competition. Empirical studies have measured the impact off FFP in prices. However, they focus on its impact through airport dominance, alliances and other features. The objective of this study is to investigate the impact of the share of locked in consumers on prices, caused by the introduction of artificial switching costs in the market. The reduced form estimates suggests a correlation of approximately 13% between current prices and the constructed variable fidelization index. The result is robust to additional estimates.