Trade is sequential: buyers arrive in batches and each batch completes trade before the next arrives. Producers allocate the available supply among all potential batches of buyers. Inventories accumulate whenever a batch does not arrive. Shocks to cost and demand are serially independent. There...

This note demonstrates that it is still possible to identify the economy's technology from national income accounting data when wages are set through a bargaining process rather than the usual competitive mechanism. Applying the method to US data, we obtain that the output elasticity with...

The model identifies the quality of a network product with the number of consumers using it. Hence, the producer cannot unilaterally control the quality of his product. Using the preference specification of vertical quality differentiation, it is shown that the largest network produced will be...

This note demonstrates that it is easily possible to compute technological parameters out of national income accounting data in the presence of bargaining in the labor market. Applying the method to US data, we obtain that the output elasticity with respect to capital exceed 0.5.

Should government subsidize R&D and does it matter how these subsidies are allocated? We examine these questions in a dynamic model where R&D is described as sequential sampling from a distribution of new ideas. Successful discoveries affect future available resources and incentives for further...