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

Dynamic competitive models of industry evolution suggest that firm profit will be more volatile and turnover will be lower in industries with higher sunk costs. These implications are consistent with empirical observation.

Two of the most robust results from dynamic competitive models of industrial organization suggest that higher-sunk-cost industries should exhibit higher intertemporal variability in the market value of their firms and lower intertemporal variability in the size of their industries. These...

It is shown that optimal penal codes are security level penal codes in a general class of stochastic dynamic Bertrand games with capacity constraints. This result allows a more complete study of the behavior of collusion over the business cycle. In an illustrative linear duopoly example with...

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' usefulness, special cases are applied to the following three s issues: (1) the relationship...

In the framework of symmetric Cournot oligopoly, this paper provides two minimal sets of assumptions on the demand and cost functions that imply respectively that, as the number of firms increases, the minimal and maximal equilibria lead to (i) decreasing industry price and increasing or...

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...