Firms relocating across industries or product lines are empirically relevant in industry dynamics: they account for 22% of exit; and two-thirds of surviving firms alter their product mix every 5 years. Yet, existing theories of industry dynamics focus exclusively on new entrants and assume that...

This paper proposes a model of Schumpeterian endogenous growth incorporating the role of market imperfections that exist due to adverse selection between investors that finance R&D and entrepreneurs that perform R&D. There is a distribution of agents indexed by a skill factor that determines...

Consider a firm with an arbitrary profit function whose relative price follows a Brownian motion with negative drift. When the firm faces a fixed cost of price adjustment, we prove the optimal pricing policy is a control band if the following sufficient conditions are met: the profit function is...

We prove in a Cournot model that the price and markup are counter-cyclical due to changes in the extent of competition if the income effect is decreasing in the price, as occurs when preferences are homothetic or demand is isoelastic.