Entry Regulation and the Influence of an Incumbent Special Interest Group
AbstractThe literature on both entry deterrence and the influence of special interest groups is extensive. In this paper we attempt to marry these strands of literature by developing a model of entry deterrence through interest group influence in an entry re-regulation context. In contrast to other entry deterrence models, we are able to investigate how product market rivalry affects the regulator's equilibrium entry decision, firms' output decisions, entry deterring activities and equilibrium welfare. We find that in equilibrium more collusive industries tend to lobby more but that the regulator attempts to compensate for weak price rivalry by allowing greater entry. The latter effect tends to offset the former, possibly entirely so that the overall welfare effect is ambiguous.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 787.
Date of creation: 2002
Date of revision:
entry regulation; entry deterrence; incumbent lobby group; Quasi-Cournot conjectural variation.;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stephen Coate & Timothy Besley, 2000.
"Elected versus Appointed Regulators: Theory and Evidence,"
NBER Working Papers
7579, National Bureau of Economic Research, Inc.
- Timothy Besley & Stephen Coate, 2003. "Elected Versus Appointed Regulators: Theory and Evidence," Journal of the European Economic Association, MIT Press, MIT Press, vol. 1(5), pages 1176-1206, 09.
- Besley, Timothy J. & Coate, Stephen, 2000. "Elected Versus Appointed Regulators: Theory And Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 2381, C.E.P.R. Discussion Papers.
- Laffont, Jean-Jacques, 1996. "Industrial policy and politics," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 14(1), pages 1-27.
- N. Gregory Mankiw & Michael D. Whinston, 1986. "Free Entry and Social Inefficiency," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 48-58, Spring.
- McCormick, Robert E & Shughart, William F, II & Tollison, Robert D, 1984. "The Disinterest in Deregulation," American Economic Review, American Economic Association, American Economic Association, vol. 74(5), pages 1075-79, December.
- Seade, Jesus K, 1980. "On the Effects of Entry," Econometrica, Econometric Society, Econometric Society, vol. 48(2), pages 479-89, March.
- Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 98(3), pages 371-400, August.
- Leora Klapper & Luc Laeven & Raghuram Rajan, 2004.
"Business Environment and Firm Entry: Evidence from International Data,"
NBER Working Papers
10380, National Bureau of Economic Research, Inc.
- Klapper, Leora & Laeven, Luc & Rajan, Raghuram G, 2004. "Business Environment and Firm Entry: Evidence from International Data," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4366, C.E.P.R. Discussion Papers.
- Klapper, Leora & Laeven, Luc & Rajan, Raghuram, 2004. "Business environment and firm entry : Evidence from international data," Policy Research Working Paper Series, The World Bank 3232, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
If references are entirely missing, you can add them using this form.