Essays on Private Equity Finance and Supply Chain Management.

Abstract

Competition and uncertainty are omnipresent in today’s economic environment. This dissertation examines competition and uncertainty in private equity (PE) and supply chains through three papers. Each paper employs Cournot and/or Bertrand models of competition together in conjunction with multiple forms of uncertainty to examine the optimal behavior for decision makers as well as consequences for other involved parties. To the author’s knowledge, this dissertation presents the first exposition and analysis of competition, multiple forms uncertainty, and barriers to entry in a single model, and also the first to apply such a theory-based model to the PE arena. It is also one of the first papers to examine the impact of subsidies in manufacturing and service environments.

Overall, the results included in this dissertation suggest that while numerous industry practices, and even regulations, endeavor to maximize benefits to recipients and participants, some counterintuitive practices, such as the granting of subsidies, or seemingly-detrimental market conditions where uncertainty is present, may in fact help recipients and/or participants achieve optimum levels of consumer surplus or profitability.