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This thesis studies dynamic information design and network theory. The thesis is composed of four chapters. In the first chapter, I study informa tion design in a dynamic moral hazard environment. An agent and an expert face a common uncertainty regarding the effectiveness of a collective decision. The agent bears the cost of effort of information ac quisition and makes the final decision. The expert is the only observer of research outcomes and provides information over time to the agent. Both parties are equally affected by the decision. I show that one opti mal information policy consists in disclosing truthfully with delay. In the first periods of time, the delay is zero, then strictly increases and finally vanishes. By the time the delay decreases back to zero, the agent has taken the decision with probability one. In the second chapter, we study a dynamic principal-agent problem, where the sole instrument the principal has to incentivize the agent is the disclosure of informa tion. The principal aims at maximizing the (discoun ted) number of times the agent chooses the principal’s preferred action. We show that there exists an optimal contract, where the principal stops disclosing informa tion as soon as its most preferred action is a static best reply for the agent, or else continues disclosing information until the agent perfectly learns the princi pal’s private information. If the agent perfectly learns the state, he learns it in finite time with probability one ; the more patient the agent, the later he learns it. In the third chapter, two types of intervention are commonly implemented in networks : characteristic intervention which influences individuals’ intrinsic incentives, and structural intervention which targets at the social links among individuals. In this paper we provide a general framework to evaluate the distinct equilibrium effects of both types of interventions. We identify a hidden equivalence between a structural intervention and an endogenously determined characteristic intervention. Compared with existing approaches in the literature, the perspective from such an equivalence provides several advantages in the analysis of targeting inter ventions of the network structure. We present a wide range of applications of our theory, including deter mining whether a structural intervention is beneficial, identifying the most wanted criminal(s) in delinquent networks, and targeting the key bridge nodes for dis connected communities. In the last chapter, we study the problem of designing efficient network sequen tially. In each period, the planner connects two unlin ked agents in the network formed in previous period, then the agents play a game with local complemen tarity under the newly formed network. The planner benefits from the entire discounted stream of equili brium welfare. We show that, forming a nested split graph in each period is an optimal strategy for the planner for any specific values of discount factors. Mo reover, when the planner heavily discounts future wel fare, the optimal strategy induces a quasi-complete graph in each period regardless of the strength of complementary effect. Our paper therefore provides a micro-foundation for quasi-complete network since it is formed under greedy algorithm. We also discuss the robustness of these results under non-linear best response and heterogeneous agents.

Advisor(s): Tristan Tomala

This three-chapter thesis investigates the interplay between government intervention and corporate financial and real behavior. The first chapter investigates how the financing of government expenditures affects corporate outcomes. I show that local governments’ increased reliance on debt to finance their expenditures adversely affects the private sector via a crowding out effect. In large developed and developing countries, local government debt mostly consists of bank loans. Using French administrative data over 2006-2018, I uncover a crowding out effect of these loans on corporate credit, investment, employment, and output. Combining causal reduced-form evidence and a model, I show that crowding out reduces the output multiplier of debt-financed local government spending by 0.3. These results show that constraints on financing supply reduce the stimulus effect of debt-financed government spending. The second chapter focuses on government intervention in the corporate sector. This chapter is in collaboration with Aymeric Bellon (Wharton) and Louis-Marie Harpedanne (Banque de France). We investigate the French credit mediation program, a policy aimed at helping firms solve their disputes with their lenders. In a mediation, an expert suggests a non-legally binding solution after communicating with all parties. Can a policy that only facilitates negotiation have any real effect? Exploiting administrative data and plausibly exogenous variation in eligibility to public mediators across counties for identification, we find that participating in a mediation reduces firms’ liquidation probability by 34.6 percentage points, and leads to higher credit, employment, and investment at the three-year horizon. All the effects are driven by firms that borrow from more than one bank. These results support the view that mediations solve coordination problems between lenders. In the last chapter, I study how the political economy distortions inherent to governments affect firms. This chapter is in collaboration with Anne-Laure Delatte (Université Paris Dauphine) and Adrien Matray (Princeton). We document a reciprocal favors scheme between local politicians and banks in France. We find that formally independent, profit-maximizing banks increase their supply of credit to the corporate sector for the constituencies of contested political incumbents in order to improve their reelection prospects. In return, politicians grant such banks access to the profitable market for loans to local public entities among their constituencies. These results show that, if politicians can control the allocation of rents, then formal independence does not ensure the private sector's effective independence from politically motivated distortions.

Advisor(s): Johan Hombert

This dissertation investigates the consequences of the complex relationships between firms and various non-market stakeholders. The first essay examines if corporate political activity (CPA) helps sustain competitive benefits. Prior literature does not address this question, only whether CPA increases profits – with mixed results over short timescales. We theorize about how political capital affects the regression-to-the-mean of profits through firm and industry persistence mechanisms. Using data on over 6,000 firms from 14 democratic countries, we estimate time-varying, firm-specific performance persistence coefficients with random-coefficient models - and profit volatility measures. Triangulation over various identification methods suggests that the half-life of political capital is shorter than expected, and also compared with other strategy interventions. Political connections are marginally effective at sustaining performance and reducing volatility, delaying profit convergence by only 0.180 years – and with no effect beyond seven years. These modest CPA benefits are further curbed by legislative constraints and political stability. The second essay highlights the tradeoffs involved in the firms’ relationship with two non-market stakeholders: politicians and social activists. This study argues that the presence of board political connections increases the susceptibility of the firm to activist actions – owing to, i. the conflicting objectives of these two non-market actors, and ii. the perceived higher sensitivity of connected firms to societal expectations. Furthermore, using a simple analytical model, I demonstrate that this effect is strongly contingent on the firms’ level of ESG (employee, social and governance policies) adoption – such that, at higher levels of ESG adoption, the liability of connectedness dissipates (or diminishes considerably). Both propositions find adequate support in the empirical analysis.Theoretically, by revealing a firm-specific determinant of activist actions, this study takes us a step closer towards defining the ‘corporate opportunity structure’ for activism, while also better characterizing the complex trade-offs involved in the firms’ relationship with various stakeholders. Finally, the third essay examines firms’ motivations for adopting CSR (corporate social responsibility) practices. I adopt the ‘risk-insurance’ view of firms’ CSR engagement to argue that when faced with an abrupt change in the institutional landscape leading to considerable muting of the rules and regulations pertaining to sustainability, firms would be keen to proactively improve corporate social performance (CSP) in order to neutralize the liability associated with being embedded in a low CSRemphasis regime. The study uses Trump’s win in the 2016 US Presidential election as an exogenous event that resulted in a marked reduction in the US govt’s emphasis on sustainability related policies. Diff-in-diff analysis on a matched sample of US and non-US firms suggest that, on average, US firms improved their sustainability footprint after Trump’s election. Considerable heterogeneity was observed based on firms’ ideological proclivities: non-partisan firms reported a significantly lower magnitude of improvement compared to their partisan counterparts.Keywords : Corporate politics, Social activism, Corporate social performance

Abstract: The three essays of this dissertation examine consumer social cognition processes which take a special resonance in today’s technological world. Essay 1 investigates the effect of the mere presence of a technological device, a smartphone, on social interactions and creativity. The initial objective of this essay was to build on the work of Przybylski and Weinstein (2013), which showed a negative effect of the mere presence of a phone on relationship formation, to extend the investigation to creativity. After two failed replications of Przybylski and Weinstein’s (2013) results and an absence of robust results on creativity, the conclusion of this work is that the effect of the mere presence of a smartphone is at least harder to find than it may have been before. The two other essays in this dissertation examine questions at the intersection of management and face perception, at a time when faces take a new place in social interactions with the development of social media and videoconferencing platforms and with the increase in facial data with social media and facial detection technologies. Essay 2 investigates brand–user facial stereotypes, the mental representations that people have of the faces of the typical users of a brand (e.g., the face of a BMW driver). The first part reveals that such shared stereotypes exist by using a method borrowed from face-perception research that is new in consumer behavior research to compose “mugshots” of different car brand users for German consumers. The second part uncovers a face–brand matching effect, whereby observers can accurately match a target’s true perfume brand to their face, above chance level, and beyond sociodemographic cues. Together, the results of Essay 2 suggest that faces and brands can be connected both in consumers’ mental representations and in their actual faces. Although this work opens managerial opportunities, consumers may not be aware of the information that their faces reveal, which raises ethical questions to address. Finally, Essay 3 explores facial name stereotypes, that is the mental representations that people have of the face of someone wearing a given name (e.g., the stereotypical face of a man named James). The first part of a study produced mugshots associated with a series of French given names (e.g., the faces associated with the names Julien and Nicolas). The second part is currently in progress. Before sending the present document, the data collected up to March 29, 2022 were analyzed (143 valid participants out of 250 preregistered participants) to get a sense of the pattern. It already reveals that the mugshots are recognized on average by an independent sample of participants, significantly above chance level. If these preliminary results are confirmed once the preregistered sample size will be attained, this research would offer direct evidence supporting the existence of facial name stereotypes while validating the use of the reverse correlation technique from Essay 2 to capture such stereotypes. The objective is to take this work forward in the management domain in one of several possible directions fleshed out in the General Discussion of this essay. Overall, this dissertation sheds light on marketing and management questions that have theoretical relevance as well as managerial and ethical implications in our real- and virtual-world.Keywords: consumer behavior, social cognition, creativity, technology, face perception

Advisor(s): Anne-Laure Sellier

This thesis studies leaning patterns in dynamic games. It consists in three independent parts. In the first one, I study non-Bayesian models of opinion formation in networks. These models consider a set of agents embedded in a network structure exchanging their opinion on some state of the world at discrete times. I propose a stochastic extension of non-Bayesian learning based on reinforcement learning models. I analyze convergence properties and characterize conditions that ensure the emergence of a consensus among a population. In the second part, I study the dynamics of social learning in routing games with incomplete public information. At discrete times, continua of agents route through a network from an origin node to a destination node. The travel time, or latency, of each edge is modeled as a function depending both on the mass of agents using that edge and a global unknown state parameter. I characterize necessary and sufficient conditions so that, in the limit, either the public belief converges to the truth or agents play an equilibrium of the full information game at each stage. In the last part, I propose a theoretical model of environmental economics. I study how two competing states balance between a short-term payment flow and a long-run payoff depending on the state of the world when they can choose between engaging in environmental transition or keeping the status quo. This model proposes an approach combining elements from revision games and games with frequency-dependent payoffs. In this context, I aim at characterizing optimal strategies and identifying conditions that allow the emergence of cooperative behavior.

Advisor(s): Tristan Tomala

This dissertation focuses on the Corporate Social Responsibility (CSR) of firms; it is framed within the strategic CSR literature stream and seeks to understand how firms are evaluated in terms of Corporate Social Responsibility and introduces the notion of CSR Capability as an internal measure of a firm’s efficiency at undertaking CSR in addition and contrast to CSR signal – what a firm communicates to investors about its CSR undertakings. First, Chapter 1 examines whether a firm engages in strategic behaviour change after a controversy and subject to global negative media coverage and asks how a firm trades off between Capability building and Signal sending in response. Then Chapter 2 seeks to disentangle a firm’s CSR Capability from the firm’s CSR-related signals i.e., examining the relationship between CSR Capability and CSR Signal with two indicators of firm financial performance: accounting and market performance. Finally, Chapter 3 explores how CSR Capability influences environmental innovation.

Advisor(s): Rodolphe Durand

This dissertation investigates how technology commercialisation and scientist mobility are influenced by the strength of national intellectual property rights (IPR) institutions. More specifically, I examine the impact of IPR institutions on firm investment and entry strategies in technological markets at the national and international levels as well as the mobility of scientists across borders and organisations. I rely on the exogenous invalidation of gene patents by the 2013 United States Supreme Court Myriad decision to develop a difference-in-differences design, with the European Union, where gene patents remained valid, as the control group. Finegrained analyses revealed interesting distinctions in firm and scientist behavior in the US and the EU. First, I found that the reduction in the strength of IPR institutions did not affect technology development investments in aggregate but led to a decrease in investments by pre-shock startups and the redeployment of investments from home areas to related new areas by pre-shock established firms. Second, I found that the reduction in the strength of IPR institutions led to an increase in inbound mobility of foreign scientists, mainly driven by highly talented scientists moving into academic organisations. Third, I found that the reduction in the strength of IPR institutions had a positive impact on market entry by foreign firms, especially by foreign new entrants.Keywords : Institutions; intellectual property rights; international; investment, mobility; market entry

Advisor(s): Denisa Mindruta, W. Mitchell

Should financial experts (e.g., buy-side asset managers and analysts) fear the rise of algorithms? As machine-readable (clean and structured) data are essential for the development and functioning of algorithms, I study this question by investigating whether financial experts benefit from more machine-readable data in information production in asset management. I first develop a model in which an institutional investor’s performance and asset holdings depend on two inputs: the amount of machine-readable data and the number of financial experts, and derive how changes induced by an increase in the amount of machine-readable data depend on the relation between the two inputs. Exploiting an exogenous regulatory shock that makes corporate filings more machine-readable, I find that institutions with more financial experts experience larger performance improvement than institutions with fewer financial experts, consistent with financial experts benefiting from more machine-readable data. This result helps evaluate the disruption brought by modern algorithms. Keywords: Information Technology; Skilled Labor; Information Acquisition.Abstract : The thesis contains three essays. In the first essay, I investigate whether financial experts benefit from more machine-readable data in information production in asset management. Exploiting an exogenous regulatory shock that makes corporate filings more machine-readable, I find that institutions with more financial experts have larger performance improvement than institutions with fewer financial experts, suggesting financial experts benefiting from more machine-readable data. This result helps evaluate the likelihood of algorithms replacing high-skilled financial practitioners. In the second essay, I study the rationale and implications of the recent MiFID II regulation in Europe that made delegated asset managers’ spending on sell-side analyst research more transparent to their clients. We show that transparency decreases the use of sell-side research but stimulates more buy-side research activities, which is consistent with empirical findings. Our model has additional predictions on managers’ performance, liquidity, and social welfare. In the third essay, I study brokers in private placement markets, who intermediate about 20% of capital raised by non-financial firms in this market. I find that projects intermediated by brokers with better reputations are more likely to be fully funded. Contrary to existing theories on underwriters, projects sold through brokers are less likely to be fully funded on average and most issuers prefer direct selling. A model that features both search frictions and asymmetric information suggests that these non-regularities may be due to the fact that the certification role of brokers is limited by competition between intermediated selling and direct selling. The model also explains some non-intuitive patterns of commission fees in the data. These results contribute to a better understanding of private placement markets and intermediaries in other financial markets.

By Junli ZHAO
Advisor(s): Jean Edouard Colliard

There are three chapters in my thesis. The first chapter is From Mandatory to Voluntary Disclosures: Conflict Mineral Reports of US Firms. Although the SEC suspended the enforcement of conflict mineral disclosure in April 2017, some firms continue to file conflict mineral reports. I study the determinants of the voluntary disclosure of conflict mineral reports in this setting and the disclosure quality of these reports. I find that firms with more extensive media coverage and firms that are the target of activist campaigns, audited by Big 4 firms, owned by institutional investors, or with higher visibility tend to file conflict mineral reports voluntarily and to have conflict mineral reports with better disclosure quality. Additionally, firms with more extensive media coverage, that are targets of activist campaigns, owned by institutional investors, or have higher visibility tend to continue to file conflict mineral reports for more years after the regulatory change. Finally, in the period after the regulatory changes, firms that are the target of activist campaigns have better disclosure quality. Broadly, my study provides insights into firms’ disclosure strategies under mandatory and voluntary regulatory regimes. The second chapter is Commitment to Regulation and Demand for Crypto Tokens. It is a joint work with Vedran Capkun and Pepa Kraft. This study analyzes how commitment to investor identification such as know-your customer policies (KYC) impacts investor demand for crypto tokens. We find that investor identity verification is associated with larger number of buyers, more transactions, greater trading volume, higher liquidity, and lower bid-ask spreads. These results are, however, limited to secondary trading, while there is no difference between adopters and non-adopters of identity verification in primary trading at the initial coin offering (ICO). We also find that an increase in regulation of crypto token issuance leads to a less severe negative impact on demand for tokens issued by firms that adopted identity verification practices, consistent with self-regulation shielding firms from negative externalities of regulation. Finally, active and diversified investors are more likely to invest in tokens issued by firms that adopted investor identity verification. The third chapter is College Information Environment and Student Default Rates, which is a joint work with Vedran Capkun and Pepa Kraft. This essay examines the relationship between the quality of a college’s information environment and student loan default10 rates. We find that poor reporting quality is associated with higher default rates. Consistent with the result that the mechanism driving this finding is the relationship being academic success and earnings potential, we find that colleges with poor reporting quality have lower graduation rates and higher student debt to income ratios upon graduation. We further find that college advertising is associated with higher student loan default rates, and the effect becomes stronger when colleges exhibit low reporting quality, suggesting that prospective students rely more on advertising when reporting quality is low. Overall, our evidence concerns that poor reporting quality and high levels of advertising lead to efficient investments in education.

Advisor(s): Vedran Capkun

Overall, in my dissertation, I aimed at answering the following question: What constitutes, drives, and structures professional agency in relation to institutions? While research has already clearly established the importance of professions and professionals as preeminent actors of institutional change (Muzio et al., 2013; Scott, 2008), I demonstrate that professional agency bears specificities that differentiate it from the agency of other actors. Throughout my three chapters, I identified three types of specificities that should be taken into account in studies of professions and professionals as agents of institutional change. First, professional agency is inscribed within local practices, which are sites of experience of institutional contradictions. I consider that in order to be fully understood, professional agency must be articulated through professional identity (Chapter 1). Additionally, connecting agency and professional identity opens ways to integrate the role of emotions in the study of professions, as causal mechanisms for professional action (Chapter 3). Last, professional agency is influenced by professions’ embeddedness in permanent interprofessional competitions (Abbott, 1988; Anteby, 2010; Barley, 1986; Nelsen & Barley, 1997). This implies that the process of taking part in regulatory agency is not only dependent on the needs of the professions to secure their own interests but also on their position in the system of professions (Abbott, 1988), (Chapter 2).Keywords: Professions, Institutional change, Professional agency, Identity, Emotions

Advisor(s): Roxana Barbulescu