This paper presents a one-sided incomplete (asymmetric) information bargaining game between a firm and a worker embedded in a general equilibrium framework. The model predicts business cycle fluctuations in the economy in response to changes in aggregate productivity. The employment level in the...

This paper extends the classic two-armed bandit problem to a many-agent setting in which N players each face the same experimentation problem. The difference with the single-agent problem is that agents can now learn from the experiments of others. Thus, experiementation produces a public good...

This paper studies optimal experimentation by a monopolist who faces an unknown demand curve subject to random changes, and who maximises profits over an infinite horizon in continuous time. We show that there are two qualitatively very different regimes, determined by the discount rate and the...

This paper analyses the impact of competition among downstream firms on a supplier's investment and on her incentive to vertically integrate. We argue that tougher competition decreases the downstream industry profit, but improved the supplier's negotiation position. In particular, the supplier...

Many recent stochastic dynamic models in economics and finance are based on the theory of Brownian motion and its control or regulation. A heuristic exposition of this theory is presented with emphasis given to Itô's Lemma, the calculation of expected values and the derivation of Smooth Pasting...