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Abstract

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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File URL: http://www.anpec.org.br/encontro2005/artigos/A05A104.pdf
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Bibliographic Info

Paper provided by ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics] in its series Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] with number 104.

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Date of creation: 2005
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Handle: RePEc:anp:en2005:104

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Postal: Secretaria da ANPEC Rua Tiradentes, 17 - Ingá Niterói, RJ 24210-510 Brazil

Related research

Keywords:

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

This paper has been announced in the following NEP Reports:

• NEP-ALL-2005-12-01 (All new papers)
• NEP-COM-2005-12-01 (Industrial Competition)
• NEP-MIC-2005-12-01 (Microeconomics)

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1. Bresnahan, Timothy F & Reiss, Peter C, 1990. "Entry in Monopoly Markets," Review of Economic Studies, Wiley Blackwell, vol. 57(4), pages 531-53, October.
2. Smith, Richard L, II, 1982. "Franchise Regulation: An Economic Analysis of State Restrictions on Automobile Distribution," Journal of Law and Economics, University of Chicago Press, vol. 25(1), pages 125-57, April.

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1. Studies on the automobile industry

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