The Political Economy of Entry Barriers
AbstractWe study a political economy model of entry barriers. Each period the policymaker determines whether to impose a high barrier to entry, and the special interest groups try to influence the policymaker's decision. Entry is accompanied by creative destruction - when many new firms enter, old firms are more likely to be driven out of the market. Therefore the current incumbents (industry leaders) tend to lobby for a higher entry barrier and potential entrants (industry followers) are likely to lobby for a freer environment for entry. We analyze both static and dynamic versions of the model to examine what kind of environment supports a policy that blocks entry. In the dynamic model, the economy can exhibit various different dynamics. In particular, multiple steady states may arise in equilibrium. (Copyright: Elsevier)
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- Toshihiko Mukoyama & Latchezar Popov, 2013. "Code files for "The Political Economy of Entry Barriers"," Computer Codes 12-249, Review of Economic Dynamics.
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
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