Using a dynamic model of capacity accumulation, I examine the relationship between uncertainty about the timing of a new Pigouvian tax and oligopolistic competition. I find that for some market structures uncertainty about the timing of the regulatory change leads firms to increase investment....

This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to implement a product innovation. Production capacities of both firms are...

We model capacity-building investments in a homogeneous product duopoly facing uncertain demand growth. Capacity building is achieved through the addition of production units that are durable and lumpy and whose cost is irreversible. While building their capacity over time, firms compete à la...

Motivated by recent developments in applied dynamic analysis, this paper presents new sufficient conditions for the existence of a Markov perfect equilibrium in dynamic stochastic games. The main results imply the existence of a Markov perfect equilibrium provided the sets of actions are...

When an agent faces audiences with heterogeneous preferences, it is non-trivial to determine what a “good” reputation means, and the return to reputation can be a non-monotonic function. We illustrate this through standard IO examples, and discuss some implications for reputation-building in...

We augment the multi-market collusion model of Bernheim and Whinston (1990) by allowing for firm entry into, and exit from, individual markets. We show that this gives rise to a new mechanism by which a cartel can sustain a collusive agreement: Collusion at the extensive margin whereby firms...

We consider a long-lived firm that faces an infinite sequence of finitely-lived consumers. In each period, the firm can exert either high or low effort, which is the firm's private information. When consumers learn about the firm's talent from the outcomes of previous transactions, there exists...

In a small open economy, fluctuations in the real exchange rate can affect plant turnover, and thus aggregate productivity, by altering the makeup of plants that populate the market. This paper develops a structural model that captures the effect of plant-level productivity and real exchange...

When the well-known BLP model is applied to products with rapid technological changes and declining prices it tends to yield implausible results. A sequence of increasingly sophisticated dynamic demand models, most recently Gowrisankaran and Rysman (2009, hereafter GR), have been developed to...

We illustrate conditions under which a trade platform selling its own products alongside third-party sellers benefits or harms consumers. This benefits consumers by lowering prices in a suite of models: a gatekeeper platform facing a competitive fringe of sellers, when fringe sellers also have...