This paper presents a set of results concerning price formation and convergence to perfect competition in markets populated by sellers of differentiated products. It generalizes results of Butters (1977), Hart (1979), Perloff and Salop (1985), Wolinsky (1986), Armstrong et al. (2009), and...

This paper develops a dynamic model of price competition where buyers have constrained consideration sets due to unawareness. Awareness evolves over time and is influenced by word-of-mouth: if more buyers choose to shop at one seller, then unaware buyers are more likely to discover that seller....

In product markets, there exists substantial dispersion in prices for transactions of physically identical goods, and incumbent sellers sell at higher prices than entrants. This study develops a theory of dynamic pricing that explains these facts as results from the same fundamental friction:...

This paper shows that perfectly competitive behavior can occur in individual markets that exhibit frictions of trading. I consider an environment where firms hire workers to produce an output sold in a product market. Both markets are frictional as consumers and workers have imperfect access to...

A growing body of research highlights the correlation between strong, centralized states and economic growth. Given the important role that national defense has played in the development of the state, it seems as though this would imply some relationship between military expenditures and...

Politics, like any social process, involves selection mechanisms that determine whether the outcomes of the process are efficient. This paper presents a model of politics as an evolutionary process. The decisions of interest groups to enter politics determines the selected policy. Our model...

The Federal Trade Commission and U.S. Justice Department’s request for information on whether and how to update the antitrust agencies’ merger-enforcement guidelines is based on several faulty premises and appears to presuppose a preferred outcome: stronger (rather than optimal) merger...