Information and Industry Dynamics

Emin Dinlersoz and Mehmet Yorukoglu

American Economic Review, 2012, vol. 102, issue 2, 884-913

Abstract: This paper develops a model of industry dynamics where firms compete to acquire customers over time by disseminating information about themselves in 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. (JEL D11, D83, L11, L81, M37)

Date: 2012
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