An infinite-horizon, stochastic model of entry and exit with sunk costs and imperfect competition is constructed. Simple examples provide insights into: (1) the relationship between sunk costs and industry concentration, (2) entry when current profits are negative, and (3) the relationship...

A supergame theoretic price-setting model of collusion is calibrated to data from the North American passenger car market before, during, and after the voluntary restraint arrangements (VRAs) with Japan. Conclusions about whether the model is consistent with the bans from the various regimes...

Amir and Lambson (2003) developed an infinite-horizon, stochastic model of entry and exit by integer numbers of firms facing sunk costs and uncertain market conditions. Here, as examples of the model's usefulness, special cases are applied to the following three issues: (1) the relationship...

Lockups are agreements by insiders of stock-issuing firms to abstain from selling shares for a specified period of time after the issue. Brav and Gompers (2003) suggests that lockups are a bonding solution to a moral hazard problem and not a signaling solution to an adverse selection problem. We...

We present a theoretical model that shows how the incentives of insiders, underwriters, and investors can interact with the nature of the firm's assets to explain the existence of lockup agreements. Lockups are commitments by insiders of stock-issuing firms to abstain from selling shares for a...