We build an asset-pricing model with dynamic strategic competition to explain the strong joint fluctuations in aggregate discount rates, competition intensity, profitability, and asset prices. Product market competition endogenously intensifies as discount rates rise, because firms compete more...

We build a competition network that links two industries through their common market leaders. Industries with higher centrality on the competition network have higher expected stock returns because of higher exposure to the cross-industry spillover of distress shocks. The competition intensity...

We document robust industry return predictability through the lens of a competition network, connecting two industries that share a multi-industry market leader. Equity returns in an industry exhibit a delayed response to cross-industry effects due to investors' limited attention and constrained...