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Doubling Down on Debt: Limited Liability as a Financial Friction

We investigate how a combination of limited liability and preexisting debt distort firms’ investment and equity payout decisions.

A Model of Product Awareness and Industry Life Cycles

This paper proposes a model where consumption bundle heterogeneity is derived from a network of connections between consumers and firms. In it, consumers slowly become 'aware' of differentiated products, adding connections and expanding their choice sets.