The usual analysis of privatization and X-inefficiency uses agency theory to model managerial effort. The authors model worker effort as determined by a bargain between firms and workers. Workers dislike effort because it lowers utility. Firms prefer high effort because it raises productivity....

We present a dynamic empirical model of a firm's R&D decisions that is consistent with the existence of sunk R&D costs, taking into account that these costs may differ between small and large firms, and among different technological regimes. We estimate a multivariate dynamic discrete choice...

Following D. Kreps and J. Scheinkman (1983), it is common to view the difference between Cournot and Bertrand competition as depending on production capacity. Bertrand undercutting is only feasible if firms have capacity to serve the market gained. If firms are capacity constrained, the Cournot...

This paper examines how firms interact with their rivals. The main novelty of the authors' approach is that they let conjectural variations depend on the actual ability of other firms to react, which they measure by both the physical capacity and financial status of firms. The authors' main...

We study entry, exit and survival of UK manufacturing establishments from 1986 to 1991 using the newly released ARD database. We document patterns of entry and exit across industries and over time. We estimate an augmented Cox proportional hazard to examine the survival of new plants in the UK...