Essays on entrepreneurship and pricing

This dissertation studies questions about the interrelationship between the macroeconomic environment and entrepreneurship as well as questions on optimal pricing. It is comprised of three chapters which can be read independently. Chapters 1 and 2 are concerned with the effects of macroeconomic trends and fluctuations on entrepreneurship. In Chapter 1 I investigate the long run decline in firm creation rates in the US since the early 1980s. I document new empirical facts on the contemporaneous increase in average firm size and relate them to the decline in firm creation rates in a quantitative model. In the second Chapter which is co-authored with Konrad Stahl and Joacim Tag we empirically analyze the relationship between variation in entrepreneurial quality and variation in firm quality and relate both to business cycle fluctuations. In Chapter 3 I analyze a theoretical model of optimal monopoly pricing in which the monopolist is uncertain about the demand he faces which introduces new tradeoffs into the optimal pricing problem