We study the dynamics of entry and exit based on firms' learning about their relative cost positions. Each firm's marginal cost of production is its own private information, thereby facing ex ante uncertainty about its cost position. The (inelastic) market demand can accommodate only a fraction...

We study an infinitely repeated Bertrand game in which an i.i.d. demand shock occures in each period. Each firm recieves a private signal about the demand shock at the beginning of each period. At the end of each period, information about both the underlying demand shock and the rival's prices...

We study an infinitely repeated Bertrand game in which an i.i.d. demand shock occurs in each period. Each firm receives a private signal about the demand shock at the beginning of each period. At the end of each period, all information but the private signals becomes public. We consider the...

In an economy where agents are characterized by different productivities (vertical types) and different abilities to move (horizontal types), we compare a unified nonlinear optimal taxation schedule with the equilibrium taxation schedule that would be chosen by two competing tax authorities if...

"This paper studies optimal relational contracts in motivating workers in a market setting. We find that labor markets with higher turnover costs will use more subjective performance pay and less efficiency wages and that in those markets, the total wage payment is lower and the equilibrium...

In many retail markets, prices rise faster than they fall. We develop a model of search with learning to explain this phenomenon of asymmetric price adjustments. By extending our static game analysis to the dynamic setting, we demonstrate that asymmetric price adjustments arise naturally. When a...

In an economy where agents have different productivities and mobility, we compare a unified nonlinear optimal taxation with the equilibrium taxation that would be chosen by two competing tax authorities if the same economy were divided into two states. The overall level of progressivity and...