This article investigates the ability of the price system to aggregate private information in a market of uncertai n size and where set-up costs are incurred by entrants. It is shown t hat the equilibrium is random even when the totality of private infor mation is so large that aggregate...

This paper explores a model of innovation and spatial co mpetition over time. A key implication of the paper is that firms' size is posit ively autocorrelated across time. The mechanism that generates this persistence works only in heterogenous product markets and is based on the idea that...

We explore entry into a foreign market with uncertain demand growth. A multinational can serve the foreign demand by two modes, or by a combination thereof: it can export its products, or it can create productive capacity via foreign direct investment (FDI). The advantage of FDI is that it...

This paper analyzes a decentralized process for the diffusion of knowledge. In equilibrium, the economy converges from an initial distribution of knowledge over agents to the steady-state distribution, which is unique. Because of the public good aspect of information, too little learning takes...

A competitive, dynamic model of entry into a new industry is set up and both its positive and normative aspects are studied. The main assumptions are that entry is sequential, that it occurs under imperfect information on the size of the market, and that better information becomes available as...

We explore entry into a foreign market with uncertain demand growth. A multinational can serve the foreign demand by two modes, or by a combination thereof: it can export its products, or it can create productive capacity via foreign direct investment (FDI). The advantage of FDI is that it...