I introduce and study dynamic persuasion mechanisms. A principal privately observes the evolution of a stochastic process and sends messages over time to an agent. The agent takes actions in each period based on her beliefs about the state of the process and the principal wishes to influence the agent’s action. I characterize the optimal persuasion mechanism and show how to derive it in applications. I then consider the extension to multiple agents where higher-order beliefs matter. (JEL D82, D83)

In analyzing deterrence of large-scale entry, two classes of entry barriers may be distinguished. An innocent entry barrier is unintentionally erected as a side effect of innocent profit maximization. In contrast, a strategic entry barrier is purposely erected to reduce the possibility of entry. Two types of innocent barriers may also be distinguished. A postentry absolute advantage has the property that, if entry did occur, the established firm would be at a profit advantage over the entrant. Examples are superior technology or product design, patents, and lower input prices. A preentry asymmetry advantage arises from the fundamental preentry asymmetry between established firm and potential entrant. Before the entrant makes his entry decision, the established firm has already committed resources. This prior existence gives first-move advantages. The preentry asymmetry is independent of symmetry or asymmetry in the rules (the equilibrium concept) of the postentry game that might ensue; even if the postentry game will be played according to Nash-Cournot or entrant-as-leader rules, the preentry leadership

Regulation is likely to change both the level and direction of innovative activity in this country, but our knowledge both of regulation and of the innovation process is too primitive for us to tell precisely what these changes will be. Rather than make major changes in the regulatory process on the grounds that they will aid innovation, we are better advised to confine our attention to improving the general climate for innovation and altering those aspects of regulation that even casual investigation may suggest be deleterious. That, is the direction suggested by most recent important studies; their degree of caution is appropriate. 5 references.

In March 1966 issue of this Review, Belton Fleisher proposed an analytical framework for assessing relationship between income and juvenile delinquency and has attempted to measure effect of income on delinquency. In a series of multiple regression analyses, he finids a general pattern of behavior. . in which the overall effect of income on delinquency appears to be negative... although there is a partial off-setting effect as a result of positive influence of income on payoff for property crimes. He also finds that unemployment appears to be a cause of delinquent behavior... (p. 132), which is consistent with his previous work on subject. Fleisher's results, however, depend heavily on choice of variables used to represent tastes for delinquency. It is purpose of this comment to show that, at least for only set of published data used by Fleisher, which is also data regarded by him as niost useful for investigating delinquency (74 community areas within Chicago): a more accurate measure of one important taste concept is available, and its inclusion substantially alters Fleisher's results. Secondlv, Fleisher's economic variables are highly collinear with additionial variables, reflecting other aspects of taste for delinquency, which might reasona'bly be included in his regressions. XVhen these variables are added, Fleisher's results are further modified and his conclusions, particularlIy those with policy implications, are vitiated.