Dynamic motivations for the use of product line extensions in the form of entry-level products are considered. When consumers are uncertain of their valuations for products, and their purchasing power evolves over time, firms competing in a lucrative luxury market may try to influence the future...

An economy is considered in which new firms require time to learn whether they will grow in size and profitability in the long run. The labor market is imperfectly competitive. I show that inefficient levels of firm entry will generally exist. Whether under or over entry occurs is tightly...

There is an extensive theoretical literature based on what is called the scale-of-operations effect, i.e., the idea that the return to managerial ability is higher the more resources the manager influences with his or her decisions. This idea leads to various testable predictions including that...