We provide empirical evidence that risk sharing enhances specialization in production. To the best of our knowledge, this well-established and important theoretical proposition has not been tested before. Our empirical procedure is summarized as follows. First, we construct a measure of...

This paper presents an empirical study of spatial competition and a methodological approach to estimating product characteristics and consumer preferences in industries with products whose characteristics are unobservable or difficult to measure.We demonstrate the effective use of panel data on...

We propose an Equilibrium concept, called Undercut-Proof equilibrium, for price competition between firms producing differentiated brands.

This paper explores the determinants and stochastic properties of hiring at the aggregate, macroeconomic level. At the core of the analysis is a present value relation which defines the worker's "asset value" for the firm and determines optimal hiring. The paper validates this relation using...

This paper presents an empirical study of spatial competition and a methodological approach to estimating product characteristics and consumer preferences in industries with products whose characteristics are unobservable or difficult to measure.We demonstrate the effective use of panel data on...

This paper demonstrates that the utilization of information that is available ex-post but unavailable ex-ante may lead to adverse incentive effects in the design of new products, i.e., in installing safety devices in products, in developing technologies that reduce the distribution of risks...

We develop a model of firm size in which firms are unable to access as many consumers as they want. Nwely arrived consumers match randomly with firms. Subsequently consumers must pay "search costs"to be able to switch firms.