Industry Dynamics: Foundations For Models with an Infinite Number of Firms

This paper explores the connection between three important threads of economic research offering different approaches to studying the dynamics of an industry with heterogeneous firms. Finite models of the form pioneered by Ericson and Pakes (1995) capture the dynamics of a finite number of heterogeneous firms as they compete in an industry, and are typically analyzed using the concept of Markov perfect equilibrium (MPE). Infinite models of the form pioneered by Hopenhayn (1992), on the other hand, consider an infinite number of infinitesimal firms, and are typically analyzed using the concept of stationary equilibrium (SE). A third approach uses oblivious equilibrium (OE), which maintains the simplifying benefits of an infinite model but within the more realistic setting of a finite model. The paper relates these three approaches. The main result of the paper provides conditions under which SE of infinite models approximate MPE of finite models arbitrarily well in asymptotically large markets. Our conditions require that the distribution of firm states in SE obeys a certain “light-tail” condition. In a second set of results, we show that the set of OE of a finite model approaches the set of SE of the infinite model in large markets under a similar light-tail condition.

Bcl-xL Deamidation Is a Critical Switch in the Regulation of the Response to DNA Damage

AbstractThe therapeutic value of DNA-damaging antineoplastic agents is dependent upon their ability to induce tumor cell apoptosis while sparing most normal tissues. Here, we show that a component of the apoptotic response to these agents in several different types of tumor cells is the deamidation of two asparagines in the unstructured loop of Bcl-xL, and we demonstrate that deamidation of these asparagines imports susceptibility to apoptosis by disrupting the ability of Bcl-xL to block the proapoptotic activity of BH3 domain-only proteins. Conversely, Bcl-xL deamidation is actively suppressed in fibroblasts, and suppression of deamidation is an essential component of their resistance to DNA damage-induced apoptosis. Our results suggest that the regulation of Bcl-xL deamidation has a critical role in the tumor-specific activity of DNA-damaging antineoplastic agents