Sunk Costs, Accommodation, and the Welfare Effects of Entry
AbstractAlthough economists usually support the unrestricted entry of firms into an industry, entry may lower welfare if there are setup costs or if entrants have a cost disadvantage. We consider the welfare effects of entry within a standard Cornot model where some of an incumbent firm's costs are sunk.
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Bibliographic InfoPaper provided by Business, Law and Economics Center, John M. Olin School of Business, Washington University in its series Washington University with number 97-03.
Length: 22 pages
Date of creation: 1997
Date of revision:
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Postal: Business, Law and Economics Center, John M. Olin School of Business, Washington University. Campus Box 1133, One Brookings Drive, St. Louis MO 63130-4899.
Web page: http://www.olin.wustl.edu/ble/
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ENTERPRISES ; SUNK COSTS;
Other versions of this item:
- Nachbar, John H & Petersen, Bruce C & Hwang, Inhak, 1998. "Sunk Costs, Accommodation, and the Welfare Effects of Entry," Journal of Industrial Economics, Wiley Blackwell, vol. 46(3), pages 317-32, September.
- D60 - Microeconomics - - Welfare Economics - - - General
- K20 - Law and Economics - - Regulation and Business Law - - - General
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
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- Manuel Willington & Fabián Basso, 2006. "Regulación, Cobertura y Competencia en el Mercado de la Banda Ancha," ILADES-Georgetown University Working Papers inv177, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
- L. Lambertini & G. Rossini, 2000. "Excess Capacity in Oligopoly with Sequential Entry," Working Papers 384, Dipartimento Scienze Economiche, Universita' di Bologna.
- T.W. Ross, 2004. "Sunk Costs and the Entry Decision," Journal of Industry, Competition and Trade, Springer, vol. 4(2), pages 79-93, 06.
- Lee, Sanghack & Cheong, Kiwoong, 2005. "Rent dissipation and social benefit in regulated entry contests," European Journal of Political Economy, Elsevier, vol. 21(1), pages 205-219, March.
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