Free Entry and Social Efficiency Under Unknown Demand Parameters
نویسندگان
چکیده
منابع مشابه
Free entry and social efficiency in an open economy
Is free entry desirable for social efficiency? We examine this question in an open economy context under a Cournot setup. Specifically, we consider a ‘home market’ where both home and foreign firms compete simultaneously. While free entry always leads to “excessive entry” in a closed economy setup (Mankiw and Whinston (1987), Suzumura and Kiyono (1986)), we find that free entry can be socially ...
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We investigate the social desirability of free entry in the co-opetition model in which firms compete in a homogeneous product market while sharing common property resources that affect market size or consumers’ willingness to pay for products. We show that free entry leads to socially excessive or insufficient entry into the market in the case of non-commitment co-opetition, depending on the m...
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Previous articles have noted the possibility of socially ineficient levels of entry in markets in whichJirms must incurjixed set-up costs upon entry. This article identijies thefundamental and intuitive forces that lie behind these entry biases. Ifan entrant causes incumbentJirms to reduce output, entry is more desirable to the entrant than it is to society. There is therefore a tendency toward...
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This papers examines the structural implications of demand shifts in free-entry oligopoly equilibria. The model generalizes the conjectural variations framework to consider asymmetric firm conjectures, allows for the possibility of cost differences across firms, and endogenizes conditions of entry and exit in the industry. In non-competitive environments, changes in incumbent output and industr...
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Consider a machine that can start production off-target where the initial offset is unknown and unobservable. The goal is to determine the optimal series of machine adjustments that minimize the expected value of the sum of quadratic off-target costs and fixed adjustment costs. Apart of the unknown initial offset, the process is supposed to be in a state of statistical control, so the process m...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2013
ISSN: 1556-5068
DOI: 10.2139/ssrn.2347123