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Note on uncertainty and socially excessive entry

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  • Anthony Creane

Abstract

It is well known that under general conditions entry into imperfectly competitive markets is usually excessive. This note explores the effects of uncertainty on this result. Specifically, a firm that incurs entry costs might fail to successfully enter a market. In this environment, it is found that the previous conditions might not hold when there is uncertainty. That is, with uncertainty entry might be socially insufficient (instead of excessive) by more than one firm.

Suggested Citation

  • Anthony Creane, 2007. "Note on uncertainty and socially excessive entry," International Journal of Economic Theory, The International Society for Economic Theory, vol. 3(4), pages 329-334, December.
    • Handle: RePEc:bla:ijethy:v:3:y:2007:i:4:p:329-334
    DOI: 10.1111/j.1742-7363.2007.00063.x
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    References listed on IDEAS

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    Cited by:

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    2. Laszlo Goerke, 2022. "Partisan competition authorities, Cournot‐oligopoly, and endogenous market structure," Southern Economic Journal, John Wiley & Sons, vol. 89(1), pages 238-270, July.
    3. Tian Wu & Bohan Zeng & Yali He & Xin Tian & Xunmin Ou, 2017. "Sustainable Governance for the Opened Electric Vehicle Charging and Upgraded Facilities Market," Sustainability, MDPI, vol. 9(11), pages 1-22, November.
    4. Laszlo Goerke, 2022. "Endogenous Market Structure and Partisan Competition Authorities," IAAEU Discussion Papers 202201, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    5. Marco de Pinto & Laszlo Goerke, 2022. "Cost uncertainty in an oligopoly with endogenous entry," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 927-948, October.
    6. Raúl Bajo‐Buenestado, 2023. "Efficient regulated entry in competitive markets with demand uncertainty," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(2), pages 413-422, June.
    7. Marco Alderighi & Claudio A. Piga, 2008. "The Circular City with Heterogeneous Firms," Discussion Paper Series 2008_03, Department of Economics, Loughborough University, revised Jul 2008.
    8. de Pinto, Marco & Goerke, Laszlo & Palermo, Alberto, 2023. "On the welfare effects of adverse selection in oligopolistic markets," Games and Economic Behavior, Elsevier, vol. 138(C), pages 22-41.
    9. Makoto Yano, 2009. "The Foundation Of Market Quality Economics," The Japanese Economic Review, Japanese Economic Association, vol. 60(1), pages 1-32, March.
    10. Keisuke Hattori & Takeshi Yoshikawa, 2016. "Free entry and social inefficiency under co-opetition," Journal of Economics, Springer, vol. 118(2), pages 97-119, June.
    11. Sarang Deo & Charles J. Corbett, 2009. "Cournot Competition Under Yield Uncertainty: The Case of the U.S. Influenza Vaccine Market," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 563-576, July.

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