Uncertainty, Investment, and Industry Evolution
研究总体和个体不确定性如何影响竞争性行业中企业的进入、总投资和价格，使用美国制造业数据检验模型含义。
We study the effects of aggregate and idiosyncratic uncertainty on the entry of firms, total investment, and prices in a competitive industry with irreversible investment.We first use standard dynamic programming methods to determine firms' entry decisions, and we describe the resulting industry equilibrium and its characteristics, emphasizing the effects of different sources of uncertainty.We then show how the conditional distribution of prices can be used as an alternative means of determining and understanding the behavior of firms and the resulting industry equilibrium.Finally, we use four-digit U.S. manufacturing data to examine some implications of the model.