Using financial measures of performance we investigate the sources of value creation in the U.S. brewing industry between 1969 and 1979. We find that market share gains in this industry at this time are not correlated with changes in value and that the performance of individual leading firms is...

Business Portfolio Planning techniques often suggest that firms should invest in industries with high profitability, high growth, or other attractive characteristics. Critiquing this view, we suggest that the same factors which lead to high profitability in an industry may cause its inefficient...

According to prevailing theory, firms diversify in response to excess capacity of factors that are subject to market failure. By probing into the heterogeneity of these factors, we develop the corollary that firms that elect to diversify most widely should expect the lowest average rents. An...

This paper documents the significant presence of diversified firms in the U.S. economy and presents three views on why firms diversify. The market power view argues that firms diversify to wield conglomerate power across markets. The agency view argues that diversification is undertaken by...

This paper is concerned with communication within a team of players trying to coordinate in response to information dispersed among them. The problem is nontrivial because they cannot communicate all information instantaneously but have to send longer or shorter sequences of messages, using...

I present a signalling model in which a multiproduct firm can use its reputation as a bond for quality by using a brand name for an established product when it introduces a new experience good. As out-of-equilibrium beliefs are specified, a false signal may be taken to imply that both the...

"Attempts to economize on decision-making time imply that groups of peers may delegate authority to a small committee of managers even though this means that the information and preferences of the uninvolved players are neglected. Decisions are more likely to be delegated to players with better...