Original article (link) posted: 04/11/2005
Gowrisankaran and Rysman "Dynamics of Consumer Demand for New Durable Consumer Goods"
The paper proposes a dynamic model of consumer preferences for new consumer durable goods and estimates it. Consumers in their model are heterogeneous. They are assumed to choose between purchasing a current product and waiting for future products, making rational forecasts about the future distribution of prices and qualities. Two actual industries, DVD players and digital cameras are estimated.
Comment
The model seems to be attractive because it examines dynamic aspects and heterogeneity of consumers that have not been done successfully in the literature, although everyone agrees the importance. I am bit wondering if incorporating the uncertain of the future markets has serious effects to the estimated results or not. In their model, consumers fully know when and what kind of products will appear. However, if the future market is uncertain in the sense that consumers only know the probability distribution of future products, there might be an additional waiting value. That is, consumers may be better off by postponing their purchase to resolve uncertainty. This option value of waiting is known as "Real Option" in finance. In real world, the arrival of new products typically depends on the result of R&D investments which is presumably stochastic. So, even firms cannot exactly know the schedule of future products in many cases. Therefore, to incorporate future uncertainty is an important extension I think.
Showing posts with label seminar. Show all posts
Showing posts with label seminar. Show all posts
2014-03-18
2011-04-06
Theory Seminar (Tatur)
Original article (link) posted: 29/10/2005
Tatur "On an Evolutionary Model and an Equilibrium Concept"
The paper proposes a new evolutionary equilibrium concept that differs drastically from those of classical equilibrium concepts like ESS, Nash Equilibrium or Correlated Equilibrium. The evolutionary model is characterized the following three crucial features.
1. Imitation (not best response)
There is no sophisticated learning. Instead, players change their strategy by imitating a successful strategy taken by other players ("natural selection")
2. Local Interaction
A single, large, geographically dispersed population plays a finite two player game and only players nearby interact.
3. Correlation
There is a correlation device on which players can condition.
In his model, each player matches a partner only nearby, without knowing if he/she would become a colum player or a row player. An equilibrium set is a set of correlated strategies which survived in the imitation dynamics with random mutations in the geographical setting.
The author applies this equilibrium concept to many games and derives cooperative outcomes most of which cannot be predicted by standard equilibrium concepts such as Nash equilibrium or ESS yet frequently observed in actual economic situations or in experiments. One outstanding result is cooperation in finitely repeated games. His equilibrium concept yields strategies involve cooperation if the repeated game is sufficiently long. Moreover, we show that as the length of the game goes to infinity, the equilibrium payoffs of the repeated game will converge to a point which maximizes the utility of the population.
Just cool!! (Although Princeton faculties didn't seem to like his evolutionary idea...)
Related papers
Ellison (1993) "Learning, Interaction, and Coordination" Econometrica, 61
Morris (2000) "Contagion" RES, 67
Tatur "On an Evolutionary Model and an Equilibrium Concept"
The paper proposes a new evolutionary equilibrium concept that differs drastically from those of classical equilibrium concepts like ESS, Nash Equilibrium or Correlated Equilibrium. The evolutionary model is characterized the following three crucial features.
1. Imitation (not best response)
There is no sophisticated learning. Instead, players change their strategy by imitating a successful strategy taken by other players ("natural selection")
2. Local Interaction
A single, large, geographically dispersed population plays a finite two player game and only players nearby interact.
3. Correlation
There is a correlation device on which players can condition.
In his model, each player matches a partner only nearby, without knowing if he/she would become a colum player or a row player. An equilibrium set is a set of correlated strategies which survived in the imitation dynamics with random mutations in the geographical setting.
The author applies this equilibrium concept to many games and derives cooperative outcomes most of which cannot be predicted by standard equilibrium concepts such as Nash equilibrium or ESS yet frequently observed in actual economic situations or in experiments. One outstanding result is cooperation in finitely repeated games. His equilibrium concept yields strategies involve cooperation if the repeated game is sufficiently long. Moreover, we show that as the length of the game goes to infinity, the equilibrium payoffs of the repeated game will converge to a point which maximizes the utility of the population.
Just cool!! (Although Princeton faculties didn't seem to like his evolutionary idea...)
Related papers
Ellison (1993) "Learning, Interaction, and Coordination" Econometrica, 61
Morris (2000) "Contagion" RES, 67
2010-12-21
Theory Seminar "Fudenberg and Levine"
Original article (link) posted: 08/10/2005
Fudenberg and Levine (2005) "A Dual Self Model of Impulse Control"
The paper proposes a "dual-self" model for a single agent decision making. In their model, the patient long-run self and a sequence of myopic short-run selves who share the same preferences over the stage-game outcome play games to decide some dynamic decision. In each period, the long-run self moves first and chooses the utility function of the myopic self possibly with some reduction in utility ("self-control"). After seeing this "self-control" level, the short-run player takes the final decision.
The model gives a unified explanation for a number of empirical regularities related to self-control problems and a value for commitment in decision problems, including the apparent time-inconsistency that has motivated models of hyperbolic discounting and Rabin's paradox of risk aversion in the large and small. The base version of the model is consistent with Gul-Pesendorfer axioms.
Comments
The paper is quite interesting and the presentation by Professor Levine was really nice. He illustrated many experimental results and explain how their theory can explain them. However, it was bit unclear for me to see their marginal contribution in the literature of behavioral Economics. It seems that there are many alternative theories which can also explain those experimental results. I must check the papers in this field at least to some extent...
Interesting Papers on Reference
Gul and Pesendorfer (2001) "Temptation and Self-Control" Econometrica, 69
: An axiomatic approach of temptation preference
Gul and Pesendorfer (2004) "Self-Control and the Theory of Consumption" Econometrica, 72
: Generalization of the 2001 paper with multi-period decision aiming for the application to macro economics
Krusell and Smith (2003) "Consumption-Savings Decisions with Quasi-Geometric Discounting" Econometrica, 71
: Multiple equilibria in hyperbolic models
Laibson (1997) "Golden eggs and hyperbolic discounting" QJE, 112
: Revival of non-exponential discounting preference
Laibson (2001) "A Cue-Theory of Consumption" QJE, 116
: Cue-theory
O'Donogue and Rabin (1999) "Doing It Now or Latter" AER, 89
: Early or latter decision
Rabin (2000) "Risk Aversion and Expected-Utility Theory: A Calibration Theorem" Econometrica
: Rabin's paradox
Thaler and Shefin (1981) "An Economic Theory of Self-Control" JPE, 89
: A pioneering work of self-control
Fudenberg and Levine (2005) "A Dual Self Model of Impulse Control"
The paper proposes a "dual-self" model for a single agent decision making. In their model, the patient long-run self and a sequence of myopic short-run selves who share the same preferences over the stage-game outcome play games to decide some dynamic decision. In each period, the long-run self moves first and chooses the utility function of the myopic self possibly with some reduction in utility ("self-control"). After seeing this "self-control" level, the short-run player takes the final decision.
The model gives a unified explanation for a number of empirical regularities related to self-control problems and a value for commitment in decision problems, including the apparent time-inconsistency that has motivated models of hyperbolic discounting and Rabin's paradox of risk aversion in the large and small. The base version of the model is consistent with Gul-Pesendorfer axioms.
Comments
The paper is quite interesting and the presentation by Professor Levine was really nice. He illustrated many experimental results and explain how their theory can explain them. However, it was bit unclear for me to see their marginal contribution in the literature of behavioral Economics. It seems that there are many alternative theories which can also explain those experimental results. I must check the papers in this field at least to some extent...
Interesting Papers on Reference
Gul and Pesendorfer (2001) "Temptation and Self-Control" Econometrica, 69
: An axiomatic approach of temptation preference
Gul and Pesendorfer (2004) "Self-Control and the Theory of Consumption" Econometrica, 72
: Generalization of the 2001 paper with multi-period decision aiming for the application to macro economics
Krusell and Smith (2003) "Consumption-Savings Decisions with Quasi-Geometric Discounting" Econometrica, 71
: Multiple equilibria in hyperbolic models
Laibson (1997) "Golden eggs and hyperbolic discounting" QJE, 112
: Revival of non-exponential discounting preference
Laibson (2001) "A Cue-Theory of Consumption" QJE, 116
: Cue-theory
O'Donogue and Rabin (1999) "Doing It Now or Latter" AER, 89
: Early or latter decision
Rabin (2000) "Risk Aversion and Expected-Utility Theory: A Calibration Theorem" Econometrica
: Rabin's paradox
Thaler and Shefin (1981) "An Economic Theory of Self-Control" JPE, 89
: A pioneering work of self-control
2010-12-06
Theory Seminar (Sigurdsson)
Original article (link) posted: 05/10/2005
Sigurdsson (2005) "Auctions as Mechanism: An Application to Bankruptcy Reorganization" Job Market Paper
In the paper, he proposes the new mechanism of reorganization of firms in cases of bankruptcy. As a matter of fact, a firm that files for bankruptcy must either liquidate under Chapter 7 of the Bankruptcy Code or reorganize under Chapter 11. The distribution follows the absolute value priority rule (APR) which states that no creditor shall receive any value until all claims senior to his have been paid in full. Legal scholars have proposed several mechanisms as alternatives to the current system of judicially supervised bargaining, widely believed to be costly, lengthy, and to result in inefficient capital structures and violations of the APR. A major drawback of those proposals is their reliance on cash payments.
In the mechanism he proposes, the entire reorganized firm is sold in a cash auction and the proceeds are distributed to creditors according to the APR. He mentions 4 advantages of his mechanism. That is, the mechanism
1) implements the APR for far more general capital structures than the simple debt and equity structures assumed in previous mechanisms.
2) all but eliminates the need for cash payments and therefore works under tight financial constraints.
3) offers the advantage of familiarity over its more novel competitors in an auction.
4) allocates ownership efficiently when creditors do not agree on the firm's value.
It seemed that the participants of the seminar liked his paper. Hope he will get a good job!!
By the way, his main advisor is Eric Maskin. I heard a rumor that he did not take a student, but it should be wrong. I would like to talk to him about my research too.
Sigurdsson (2005) "Auctions as Mechanism: An Application to Bankruptcy Reorganization" Job Market Paper
In the paper, he proposes the new mechanism of reorganization of firms in cases of bankruptcy. As a matter of fact, a firm that files for bankruptcy must either liquidate under Chapter 7 of the Bankruptcy Code or reorganize under Chapter 11. The distribution follows the absolute value priority rule (APR) which states that no creditor shall receive any value until all claims senior to his have been paid in full. Legal scholars have proposed several mechanisms as alternatives to the current system of judicially supervised bargaining, widely believed to be costly, lengthy, and to result in inefficient capital structures and violations of the APR. A major drawback of those proposals is their reliance on cash payments.
In the mechanism he proposes, the entire reorganized firm is sold in a cash auction and the proceeds are distributed to creditors according to the APR. He mentions 4 advantages of his mechanism. That is, the mechanism
1) implements the APR for far more general capital structures than the simple debt and equity structures assumed in previous mechanisms.
2) all but eliminates the need for cash payments and therefore works under tight financial constraints.
3) offers the advantage of familiarity over its more novel competitors in an auction.
4) allocates ownership efficiently when creditors do not agree on the firm's value.
It seemed that the participants of the seminar liked his paper. Hope he will get a good job!!
By the way, his main advisor is Eric Maskin. I heard a rumor that he did not take a student, but it should be wrong. I would like to talk to him about my research too.
2010-10-08
IO Seminar (Kadyrzhanova)
Original article (link) posted: 28/09/2005
Kadyrzhanova "The Leader-Bias Hypothesis: Monopolization and Industry Structure under Imperfect Corporate Control" Job Market Paper
The paper examines the effect of the imperfect corporate control in a dynamic oligopoly market with cost reducing R&D investments. The managers are assumed to have an over-producing incentive ("empire-building" hypothesis), and hence, they do not maximize firms' short-run profit without intervention of the shareholders. Corporate control serves to shift managers' preference from "empire-building" to "profit maximization".
The key observation is that shareholders may want to choose imperfect control because of the commitment benefit of the over-producing derived by "empire-building" preference of the manager. Indeed, she shows that even if there is no cost of corporate control, shareholders do not choose full control. Moreover, it is shown that shareholders are more willing to leave discretionary authority to managers when ahead of rivals, which results in lower turnover, higher concentration, persistently monopolized markets, and significantly lower consumer surplus.
Comments
I found the paper quite interesting. However, there were so many things she put in her presentation and the relationship among those are not clear enough for me. I am afraid that audiences also got little because her focus of the talk is vague. I think her presentation could have become much better if she had tried the followings:
1) Stress and make clear the contribution to the literature
2) Put more intuitive explanation of the main results
3) Be more confident on mathematical parts
4) Mention some actual story in markets or empirical facts as a motivation
5) Explain which element of the model is a key to derive the corresponding result
Interesting Papers in Reference
Athey and Schmutzler (2001) "Investment and Market Dominance" RAND 32 (1): 1-26
Bagwell, Ramey and Spulber (1997) "Dynamic Retail Price and Investment
Competition" Rand, 28(2), 207-227
Bolton, Brodley, and Riordan (2000) "Predatory Pricing: Strategic Theory and Legal Policy" Georgetown Law Journal, 88, pp. 2239-2330
Bolton and Scharfstein (1990) "A Theory of Predation Based on Agency Problems in Financial Contracting" American Economic Review 80(1): 93-106
Cabral and Riordan (1994) "The Learning Curve, Market Dominance and Predatory Pricing" Econometrica, 62, pp. 1115-1140
Fershtman and Judd (1987) "Equilibrium Incentives in Oligopoly" American Economic Review, 77(5), 927-940
Kadyrzhanova "The Leader-Bias Hypothesis: Monopolization and Industry Structure under Imperfect Corporate Control" Job Market Paper
The paper examines the effect of the imperfect corporate control in a dynamic oligopoly market with cost reducing R&D investments. The managers are assumed to have an over-producing incentive ("empire-building" hypothesis), and hence, they do not maximize firms' short-run profit without intervention of the shareholders. Corporate control serves to shift managers' preference from "empire-building" to "profit maximization".
The key observation is that shareholders may want to choose imperfect control because of the commitment benefit of the over-producing derived by "empire-building" preference of the manager. Indeed, she shows that even if there is no cost of corporate control, shareholders do not choose full control. Moreover, it is shown that shareholders are more willing to leave discretionary authority to managers when ahead of rivals, which results in lower turnover, higher concentration, persistently monopolized markets, and significantly lower consumer surplus.
Comments
I found the paper quite interesting. However, there were so many things she put in her presentation and the relationship among those are not clear enough for me. I am afraid that audiences also got little because her focus of the talk is vague. I think her presentation could have become much better if she had tried the followings:
1) Stress and make clear the contribution to the literature
2) Put more intuitive explanation of the main results
3) Be more confident on mathematical parts
4) Mention some actual story in markets or empirical facts as a motivation
5) Explain which element of the model is a key to derive the corresponding result
Interesting Papers in Reference
Athey and Schmutzler (2001) "Investment and Market Dominance" RAND 32 (1): 1-26
Bagwell, Ramey and Spulber (1997) "Dynamic Retail Price and Investment
Competition" Rand, 28(2), 207-227
Bolton, Brodley, and Riordan (2000) "Predatory Pricing: Strategic Theory and Legal Policy" Georgetown Law Journal, 88, pp. 2239-2330
Bolton and Scharfstein (1990) "A Theory of Predation Based on Agency Problems in Financial Contracting" American Economic Review 80(1): 93-106
Cabral and Riordan (1994) "The Learning Curve, Market Dominance and Predatory Pricing" Econometrica, 62, pp. 1115-1140
Fershtman and Judd (1987) "Equilibrium Incentives in Oligopoly" American Economic Review, 77(5), 927-940
2010-09-04
Theory Seminar (Gilboa, Lieberman and Schmeidler)
Original article (link) posted: 24/09/2005
Gilboa, Lieberman and Schmeidler "Empirical Similarity"
Although the above paper was supposed to be talked about, Professor Gilboa mainly explained the following paper.
Billot, Gilboa, Samet and Schmeidler (2005) "Probabilities as similarity-weighted frequencies" Econometrica, 73
The above two papers consider a decision rule when a decision maker who has data on past outcomes is asked to express her beliefs by assigning probabilities to certain possible states. As the original database becomes large, empirical frequency may not help for her to make a decision at all. Instead, she may assign a higher weight to more similar case in evaluating the probability of a state.
Billot et.al show that if beliefs given a union of two databases are a convex combination of beliefs given each of the databases, the belief formation process follows a simple formula: beliefs are a similarity-weighted average of the beliefs induced by each past case. However, their axiomatization does not suggest a particular similarity function, or even a particular form of the function. Gilboa et.al develop tools of statistical inference for parametric estimation of the similarity function, assuming that such a function governs the data generating process.
Notice that the axioms in the papers cannot be consistent with the situation where the range of belief becomes smaller as the number of observation increases or a decision maker cares about a trend of outcomes.
Presentation by Professor Gilboa was very clear and he was quite good at using power point (!!). But it was difficult to understand the material. I might need to study decision theory at least little bit... (It might be good to read his book "A Theory of Case-Based Decisions". The Japanese translated edition is also available.)
Gilboa, Lieberman and Schmeidler "Empirical Similarity"
Although the above paper was supposed to be talked about, Professor Gilboa mainly explained the following paper.
Billot, Gilboa, Samet and Schmeidler (2005) "Probabilities as similarity-weighted frequencies" Econometrica, 73
The above two papers consider a decision rule when a decision maker who has data on past outcomes is asked to express her beliefs by assigning probabilities to certain possible states. As the original database becomes large, empirical frequency may not help for her to make a decision at all. Instead, she may assign a higher weight to more similar case in evaluating the probability of a state.
Billot et.al show that if beliefs given a union of two databases are a convex combination of beliefs given each of the databases, the belief formation process follows a simple formula: beliefs are a similarity-weighted average of the beliefs induced by each past case. However, their axiomatization does not suggest a particular similarity function, or even a particular form of the function. Gilboa et.al develop tools of statistical inference for parametric estimation of the similarity function, assuming that such a function governs the data generating process.
Notice that the axioms in the papers cannot be consistent with the situation where the range of belief becomes smaller as the number of observation increases or a decision maker cares about a trend of outcomes.
Presentation by Professor Gilboa was very clear and he was quite good at using power point (!!). But it was difficult to understand the material. I might need to study decision theory at least little bit... (It might be good to read his book "A Theory of Case-Based Decisions". The Japanese translated edition is also available.)
2010-07-18
IO Seminar (Daughety and Reinganum)
Original article (link) posted: 21/09/2005
Daughety and Reinganum "Imperfect Competition and Quality Signaling"
The paper investigates the one-shot oligopoly model where firms produce substitute products with associated vertical quality measure. Each firm has private information about its quality (="type") and signaling effects by pricing are captured. Their main focus is comparison between separating equilibria of incomplete information (about vertical quality) and that of complete information.
As main results, they show the following;
1) incomplete information (signaled via prices) softens price competition, and imperfect competition can reduce the degree to which firms distort their prices to signal their types
2) low-quality firms always prefer playing the incomplete information game to the full-information analog
3) if the proportion of high-quality firms is great enough, they also prefer incomplete information to full-information
It is very difficult for me to judge their contribution in this field because there are so many papers in the literature and some of them look quite similar to this paper at least for those who are not familiar with this line of research. The model in the paper tries to capture the both effects of incomplete information and imperfect competition, which makes it very complicated. Although the main results mentioned above sound interesting, similar kind of qualitative results can be derived in simpler model I guess. For example, the comparison between a separating equilibrium and a pooling one in a simple Spence type signaling model has the implications quite similar to (2) and (3). Of curse, except for the results (1)-(3), they show a bunch of comparative static and some of them are interesting and not obvious. However, I would like to say it should be needed for them to say why such a complicated model is used to explain the results most of which were already known and hence not surprising.
The literature review (Section 2) is comprehensive. So, if you are interested in the paper, it might be better to read some key references before deeply tackle this paper.
Interesting papers in References
Bagwell and Riordan (1991) "High and Declining Prices Signal Product Quality" AER, 81
Mailath (1989) "Simultaneous Signaling in an Oligopoly Model" QJE, 104
Martin (1995) "Oligopoly Limit Pricing: Strategic Substitutes, Strategic Complements" IJIO, 13
Daughety and Reinganum "Imperfect Competition and Quality Signaling"
The paper investigates the one-shot oligopoly model where firms produce substitute products with associated vertical quality measure. Each firm has private information about its quality (="type") and signaling effects by pricing are captured. Their main focus is comparison between separating equilibria of incomplete information (about vertical quality) and that of complete information.
As main results, they show the following;
1) incomplete information (signaled via prices) softens price competition, and imperfect competition can reduce the degree to which firms distort their prices to signal their types
2) low-quality firms always prefer playing the incomplete information game to the full-information analog
3) if the proportion of high-quality firms is great enough, they also prefer incomplete information to full-information
It is very difficult for me to judge their contribution in this field because there are so many papers in the literature and some of them look quite similar to this paper at least for those who are not familiar with this line of research. The model in the paper tries to capture the both effects of incomplete information and imperfect competition, which makes it very complicated. Although the main results mentioned above sound interesting, similar kind of qualitative results can be derived in simpler model I guess. For example, the comparison between a separating equilibrium and a pooling one in a simple Spence type signaling model has the implications quite similar to (2) and (3). Of curse, except for the results (1)-(3), they show a bunch of comparative static and some of them are interesting and not obvious. However, I would like to say it should be needed for them to say why such a complicated model is used to explain the results most of which were already known and hence not surprising.
The literature review (Section 2) is comprehensive. So, if you are interested in the paper, it might be better to read some key references before deeply tackle this paper.
Interesting papers in References
Bagwell and Riordan (1991) "High and Declining Prices Signal Product Quality" AER, 81
Mailath (1989) "Simultaneous Signaling in an Oligopoly Model" QJE, 104
Martin (1995) "Oligopoly Limit Pricing: Strategic Substitutes, Strategic Complements" IJIO, 13
2010-07-11
IO Seminar (Rob and Fishman)
Original article (link) posted: 14/09/2005
Rob and Fishman "Is Bigger Better? Customer base expansion through word of mouth reputation" forthcoming in JPE
The paper develops a modeling framework in which a firm regards its reputation as a capital assets whose value is maintained through a process of active and continuous investment. Firms are required to investment for each period to produce high quality products. The quality of the product is only known to a consumer who buys it from the firm (experience good assumption), and she will tell this information to a new consumer with some probability. This information spread captures "word of mouth reputation".
Their main finding is that investment in quality is positively related to the size of customer base which is defined as the number of consumers who are aware of the firm's reputation. This is because reputation is costly to acquire and takes a long time to regain once it has been lost, and hence, a good reputation is more valuable to a firm the larger its customer base is. The model predicts that the larger is a firm, the more it invests in quality, and the higher is the average quality it delivers.
Interesting papers in references
Horner (2002) "Reputation and Competition" AER, 92
Mailath and Samuelson (2001) "Who wants a Good Reputation" RES, 68
Shapiro (1983) "Premiums for High Quality Products as Returns to Reputation" QJE, 98
Tadelis (2002) "The Market for Reputation as an Incentive Mechanism" JPE, 92
Their contribution in the literature is stated as follows.
What differentiates our approach from all these papers is that reputation in our model spreads in the market through word of mouth, or referrals - consumers tell other consumers about their experience, causing some firms to grow and other firms to decline. As a consequence, a firm starts out small, grows gradually, and changes its investment as its reputation is established. These interrelated processes of firm growth, reputation formation, and the links between age, size, and investment in quality represent our main contribution to the literature.
Rob and Fishman "Is Bigger Better? Customer base expansion through word of mouth reputation" forthcoming in JPE
The paper develops a modeling framework in which a firm regards its reputation as a capital assets whose value is maintained through a process of active and continuous investment. Firms are required to investment for each period to produce high quality products. The quality of the product is only known to a consumer who buys it from the firm (experience good assumption), and she will tell this information to a new consumer with some probability. This information spread captures "word of mouth reputation".
Their main finding is that investment in quality is positively related to the size of customer base which is defined as the number of consumers who are aware of the firm's reputation. This is because reputation is costly to acquire and takes a long time to regain once it has been lost, and hence, a good reputation is more valuable to a firm the larger its customer base is. The model predicts that the larger is a firm, the more it invests in quality, and the higher is the average quality it delivers.
Interesting papers in references
Horner (2002) "Reputation and Competition" AER, 92
Mailath and Samuelson (2001) "Who wants a Good Reputation" RES, 68
Shapiro (1983) "Premiums for High Quality Products as Returns to Reputation" QJE, 98
Tadelis (2002) "The Market for Reputation as an Incentive Mechanism" JPE, 92
Their contribution in the literature is stated as follows.
What differentiates our approach from all these papers is that reputation in our model spreads in the market through word of mouth, or referrals - consumers tell other consumers about their experience, causing some firms to grow and other firms to decline. As a consequence, a firm starts out small, grows gradually, and changes its investment as its reputation is established. These interrelated processes of firm growth, reputation formation, and the links between age, size, and investment in quality represent our main contribution to the literature.
Subscribe to:
Posts (Atom)