The literature on networks suggests that the value of a network is positively affected by the number of geographically dispersed locations it serves (the quot;network effectquot;) and the number of its users (the quot;production scale effectquot;). We show that as a result a firm's expected time...

This paper seeks to explain why monopolies keep their nominal prices constant for longer periods than do tight oligopolies. We provide two possible explanations. The first is based on the presence of a small fixed cost of changing prices. The second, on small costs of discovering the optimal...