Information and Industry Dynamics
August 2010
Working Paper Number:
CES-10-16R
Abstract
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.
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demand,
market,
statistical,
enterprise,
sale,
company,
commerce,
recession,
retailer,
revenue,
stock,
competitor,
equilibrium,
industry concentration,
customer,
marketing
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Ordinary Least Squares,
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IBM,
Journal of Economic Literature,
Business Register,
Herfindahl Hirschman Index
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