Demand and Supply in New Markets: Diffusion with Bilateral Learning
研究新市场中需求和供给如何共同演化，企业和消费者通过观察对方行为进行贝叶斯学习，导致市场两侧的信息扩散，模型解释了S形扩散路径的成因。
I explore the endogenous joint evolution of demand and supply in new markets. Firms and consumers learn, in a Bayesian fashion, by observing the behavior of other firms and consumers, respectively. As a result, endogenous information diffusion takes place on both sides of the market. In equilibrium, entry occurs in waves and its level depends on two distinct informational effects. The model identifies an externality that provides a natural explanation for S-shaped diffusion paths: entry reveals information to the consumers about the value of the new product, and thus early waves of entry affect the expected profitability of subsequent entry.