This paper aims to investigate, using data on both the placing of automobile dealers and automobile demand and supply variables, the effects of new automobile dealers' entry in previously monopoly markets. First, we identify relevant variables which influence the existence and the number of automobile dealers in a geographical area. Then, using an adapted model from Bresnahan e Reiss (1990), we estimate the fixed costs of new auto dealers' entry in monopoly markets. We conclude that the fixed costs of entry of a second automobile dealer do not seem to be significantly higher than the fixed costs of entry of the first one. This conclusion increases the probability that the exclusivity clause present in the concession contracts does not harm the competition in the automobile Brazilian distribution market.
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Length: Date of creation: 2005 Date of revision: Handle: RePEc:anp:en2005:104
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Find related papers by JEL classification: L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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