American Economic Review: Vol. 102 No. 2 (April 2012)


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Information and Industry Dynamics

Article Citation

Dinlersoz, Emin M., and Mehmet Yorukoglu. 2012. "Information and Industry Dynamics." American Economic Review, 102(2): 884-913.

DOI: 10.1257/aer.102.2.884


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)

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Dinlersoz, Emin M. (Center for Econimic Studies, US Census Bureau)
Yorukoglu, Mehmet (Central Bank of Turkey)

JEL Classifications

D11: Consumer Economics: Theory
D83: Search; Learning; Information and Knowledge; Communication; Belief
L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L81: Retail and Wholesale Trade; e-Commerce
M37: Advertising

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