Problem definition: This paper studies a supply chain in which a manufacturer sells a product to consumers through a retailer. The retailer makes an endogenous demand improvement decision on whether or not to increase the potential market base, which is imperfectly observed by the manufacturer....

We present a new volatility model, simple to implement, that combines various attractive features such as an exponential moving average of the price and a leverage effect. This model is able to capture the so-called 'panic effect', which occurs whenever systematic risk becomes the dominant...

Why do some sellers set prices in nominal terms that do not respond to changes in the aggregate price level? In many models, prices are sticky by assumption. Here it is a result. We use search theory, with two consequences: prices are set in dollars since money is the medium of exchange; and...

Why do some sellers set nominal prices that apparently do not respond to changes in the aggregate price level? In many models, prices are sticky by assumption; here it is a result. We use search theory, with two consequences: prices are set in dollars, since money is the medium of exchange; and...