An Imperfect Competition Suite

This thesis consists of three essays on unrelated topics. The first essay examines the macroeconomic issue of sunspot equilibria, while the second and third essays examine issues in the field of industrial organization relating to exclusive contracts and advertising. Each essay is unified in that the role of imperfect competition is a central focus in the analysis of its respective topic.;Chapter 1 of the thesis constructs a simple overlapping generations model with money and production in an environment of monopolistically competitive firms and an increasing returns to scale production technology. Within this framework, symmetric stationary sunspot equilibria are generated without requiring the assumption of gross complementarity between future consumption and current leisure. Output fluctuations may also be highly persistent in this model. These findings are in contrast to the existing sunspot literature.;Chapter 2 examines the use of exclusive contracts by monopolistic firms for anti-competitive purposes. In this essay, exclusive contracting is an equilibrium for reasons that are distinct from those in previous studies. The novelty of this essay is the introduction of a new buyer bringing additional demand into the market. The demand of the new buyer, by itself, is insufficient to support the entry of a new seller. The new seller would enter, however, if it could compete for the demand of the entire market. It is therefore argued that a purpose of exclusive contracts may be to foreclose access existing demand so as to impede the entry of new competitors. By impeding entry, the incumbent seller can then monopolize the portion of the market which is expected to grow--the new buyer. In this essay, it is shown that such exclusive contracting equilibria can exist in a model with very limited contractual restrictions.;The third chapter examines a duopoly model of advertising with two period lived consumers. In this model, firms may be one of two types; a high quality firm or a low quality firm. Consumers cannot determine the quality of a given firm\u27s product in finite time. They therefore rely on their previous consumption experiences and the promotional activity of the firms to decide which firm (if any) to buy from. Within this framework, it is shown that when advertisements contain verifiable information concerning market shares, in equilibrium, only the high quality firm advertises and it advertises in cycles. When advertising messages concerning market shares cannot be verified by consumers, there does not exist a separating equilibrium in which advertising acts as a signal of product quality. This last result is in contrast to the previous literature which examines the role of advertising as a signal of product quality