The Theory of Endogenous Market Structures: A Survey
AbstractMost market structures are neither perfectly or monopolistically competitive: they are characterized by a small number of large firms engaged in strategic interactions in their production and investment decisions. Yet, most of our economic theories are still based on a simplified world where firms are either small price takers producing under constant returns to scale (perfect competition) or isolated price setters (monopolistic competition). The theory of EMSs analyzes markets in partial and general equilibrium where strategies affect entry and entry affects strategies, and only exogenous primitive conditions on technology and preferences affect the equilibrium outcome. Understanding market structures means to understand how many firms are active in a market, which strategies they adopt and how primitive conditions and policy shocks affect them in a static or dynamic perspective.
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Bibliographic InfoPaper provided by Department of Economics, University of Venice "Ca' Foscari" in its series Working Papers with number 2012_11.
Date of creation: 2012
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Endogenous entry; oligopoly; sunk costs; general equilibrium;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- E20 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
- NEP-COM-2012-07-23 (Industrial Competition)
- NEP-IND-2012-07-23 (Industrial Organization)
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