We present a model in which price dispersion allows long run increasing returns to scale to emerge from a competitive short run. The model hinges upon turnover in the productive technology-leading firm, price dispersion resultant of Stigler's logic of rational search and limited excludability of...

We build a multi-agent model of endogenous technical change in which heterogeneous investments in patented knowledge generate Pareto-Levy and lognormal distributed returns to investment in research from very weak distributional assumptions. Firms produce a homogenous good and a public stock of...

The pure model of replicator dynamics though providing important insights in the evolution of markets has not found much of empirical support. This paper extends the model to the case of firms vertically integrated in value chains. We show that i) by taking value chains into account, the...

This paper aims at providing an explanation of the observed espresso price dispersion across major Italian cities. The empirical evidence suggests a positive relationships between the average espresso price in a city and the number of coffee shops (normalized for the adult population) operating...