We analyze a infinitely repeated tariff-setting game by two large countries with alternating moves. We focus on the subgame perfect equilibria in which each country chooses its tariff according to a stationary function of the other country's tariff. We show that there are many equilibria with...

We study rational bubbles in a standard linear asset price model. We first consider a class of bubble processes driven by multiplicative iid shocks. We show that a bubble process in this class either diverges to infinity with probability one, converges to zero with probability one, or keeps...

This paper studies necessity of transversality conditions for the continuous time, reduced form model. By generalizing Benveniste and Scheinkman's (1982) "envelope" condition and Michel's (1990) version of the squeezing argument, we show a generalization of Michel's (1990, Theorem 1) necessity...

We provide an alternative theoretical explanation for a number of empirical regularities relating to the dynamics of industry structrure (product life cycle) and changes in size and age distribution of firms over time. We explain why entry may continue over a considerable period of time, why...