Information and Industry Dynamics
This paper develops a dynamic industry model in which firms compete to acquire customers over time by disseminating information about themselves under the presence of random shocks to their efficiency. The properties of the model’s stationary equilibrium are related to empirical regularities on firm and industry dynamics. As an application of the model, the effects of a decline in the cost of information dissemination on firm and industry dynamics are explored.
|Date of creation:||Aug 2010|
|Date of revision:||Sep 2012|
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National Bureau of Economic Research, Inc.
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