We present a model in Costly State Verification framework that relates capital raised in a firm to profitability. We explain how optimality of investment is affected by how the aggregate funding affects the expected outcomes of the project. Although we find underinvestment, the problem does not...

The present paper studies the naturally observed phenomenon of population fluctuation in the context of a minimal plankton model. The analysis of the basic model reveals asymptotic stable behavior that is unable to explain any kind of population outburst. We introduce the nonuniform spatial...