We propose a framework for analyzing transformations of demand. Such transformations frequently stem from changes in the dispersion of consumers` valuations, which lead to rotations of the demand curve. In a wide variety of settings, profits are a U-shaped function of dispersion. A high level of...

This paper considers the impact of reviewers on sales of products of quality unknown to consumers. Sales occur simultaneously after consideration by a reviewer with a known level of bias. Consumers observe the reviewer`s decision and a private signal. We find that: (a) with flexible prices and...

Fingold and Soskice (1988) argue that Britain is trapped in a "low-skills" equilibrium. In Redding (1996), this notion is formalized in a dynamic model which relies on strategic complementarities between firms' investments in R&D and workers' investments in human capital. In this paper, we...