This article develops a theory of how capital, skilled labor, and unskilled labor interact at the plant level. The theory has implications for the relationship between factor allocation and plant size and the effects of trade and growth on the skill premium. The theory is consistent with certain...

We study a dynamic duopoly model with differentiated products and network externalities. New consumers appear each period and the value of the product depends on the size of the network in the current and in the previous period, for example due to availability of add-ons or quot;softwarequot;....

I introduce a Bayesian-learning model of the firm to account for a variety of empirical facts about firms. The many tasks the firm can undertake (the scope of the firm) are informationally related, so that the firm can enjoy some economies of scope from information. The model predicts changes in...