The central prediction of the Aghion et al. (2005) model is an inverted U-shaped relation between innovation and competition. The model is built on the assumption of a product market and has not yet been empirically tested on service-sector firms. Using detailed firm-level data, we find the...

This paper examines the decision to create barriers to arbitrage for a firm selling on two national markets. Sunk costs of market segmentation imply that the option to segment markets is more valuable the greater the variability of purchasing power between markets. One result is that a monetary...

The pattern of trade between nations is well understood, but much less is known about firm level determinants to export: why do some firms start to export while others continue to produce for the domestic market? One reason for different firm strategies could be that the fixed costs for export...

There has been a revival of interest in small scale industries and their linkages with a nation's institutional arrangements, among both academicians and policy makers. Extending the definition of institutions to include formal and informal rules, this paper attempts to identify these lingages...

This paper analyzes a finite horizon, sequential move pricing duopoly, restricting attention to Markov-strategies. The solution yields stationary patterns, independent of initial conditions, where the reaction-functions follow cycles of three periods. The market price never settles down, and is...

We study the choice of drug for the treatment of high blood pressure (hypertension) in Sweden between 1988-1994. During this time period calcium antagonists and ACE-inhibitors increased their market shares at the expense of the older drugs diuretics and beta-blockers. We use a prescription micro...

Within most organizations, agents may spend time on a variety of tasks, productive and redistributive. In this paper, I derive an optimal multi-task incentive scheme under the realistic assumption that agents have limited liability. The wage level is shown to increase with an agent's discretion...