Department of Economics2024-11-0920000165-176510.1016/S0165-1765(00)00333-52-s2.0-0034357472http://dx.doi.org/10.1016/S0165-1765(00)00333-5https://hdl.handle.net/20.500.14288/10565Empirical evidence indicates that there can be persistent profit differentials between firms in an industry. We show that demand uncertainty and costly information acquisition by firms on market demand leads to significant profit differentials for intermediate levels of demand variability.EconomicsJournal Article165057400018Q39015