IDEAS home Printed from https://ideas.repec.org/a/bpj/bejeap/v25y2025i3p665-679n1007.html
   My bibliography  Save this article

Social Efficiency of Free Entry in a Vertically Related Industry with Cost and Technology Asymmetry

Author

Listed:
  • Chen Ding

    (School of Economics and Management, Xi’an Shiyou University, Xi’an, Shaanxi, China)

  • Wu Di

    (School of Economics, Nankai University, Tianjin, China)

  • Cao Hang

    (School of Business Administration, Jiangxi University of Finance and Economics, Nanchang, China)

  • Wang Leonard F. S.

    (Asia Pacific Research Foundation, Kaohsiung, Taiwan)

Abstract

This paper examines the impact of cost and technology asymmetry on social efficiency in a vertically related industry. If production costs for final goods are asymmetric and technology is symmetric, and if the entrant’s cost is moderate, then downstream entry is socially insufficient, regardless of whether there are economies or diseconomies of scale. Extending the analysis to asymmetric production technologies and symmetric cost, we show that the issue of socially insufficient entry persists. Thus, anti-competitive entry regulations should account for cost and technology asymmetries among competing firms.

Suggested Citation

  • Chen Ding & Wu Di & Cao Hang & Wang Leonard F. S., 2025. "Social Efficiency of Free Entry in a Vertically Related Industry with Cost and Technology Asymmetry," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 25(3), pages 665-679.
    • Handle: RePEc:bpj:bejeap:v:25:y:2025:i:3:p:665-679:n:1007
    DOI: 10.1515/bejeap-2024-0280
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejeap-2024-0280
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejeap-2024-0280?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejeap:v:25:y:2025:i:3:p:665-679:n:1007. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyterbrill.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.