We develop a general equilibrium model in which heterogeneous entrepreneurs produce output in the presence of financing constraints. We model granular uncertainty as the shocks that affect the uncertainty in future idiosyncratic productivity without changing the cross-sectional dispersion of...

This paper analyzes a model of oligopolistic competition with ongoing investment. It incorporates the following models as special cases: incremental investment, patent races, learning-by-doing, and network externalities. We investigate circumstances under which a firm with low costs or high...

We demonstrate the dual affects that regulatory rules and firms' complementary assets have on the timing of new product introductions in the pharmaceutical industry. We develop theory and evidence to explain how incumbent firms respond with new product introductions to a change in their...

The Copyright Act grants authors and users a set of entitlements in copyrightable works. It is questionable whether and to what extent authors and users can reallocate these rights by entering into legally enforceable contracts. The Seventh Circuit’s historic decision in ProCD, Inc v...

Many manufacturing industries, including the computer industry, have seen large increases in productivity growth rates and have experienced a reduction in average establishment size and a decrease in the variance of the sizes of plants. A vintage capital model is introduced where learning...

In theory, uncertainty and sunk costs can influence industry dynamics through the option value and financing constraints channels. Empirical evaluation of these models in the context of industry dynamics are, however, at a nascent stage. Our empirical analysis, covering 267 U.S. manufacturing...

Patent scope is central to the sale of ideas, which can spur economic growth and provide significant gains from trade. Awarding an inventor a patent on a new idea partially solves a commitment problem that would otherwise prevent the inventor from selling the idea. (Arrow, 1962). In the absence...

This paper discusses the process being used in Bosnia to convert the books of Bosnian enterprises so that they will comply with the new Bosnian accounting standards, which are identical to International Accounting Standards. Bosnian accountants were generally not familiar with the new rules,...

This paper focuses on the strategic use of firms’ R&D agreements to overcome R&D inefficiencies under asymmetric information and research spillovers. We introduce a duopoly game where initially one firm is not fully informed on its rival’s R&D productivity. We show that, without R&D...

Does watching more pirated streaming video mean spending less time watching non-pirated streaming video? This study measures whether, and how much, time spent watching pirated video crowds out time spent on streaming video apps. While prior studies have estimated the impact of piracy on sales...