Using a simple two-firm, two-period model, we analyze for a developing economy the process of ‘entrepreneurial entry,’ that is, entry by new firms into an industry that did not previously exist in that country, focusing on the choice between formal and informal status. Thus we explore issues such as how informality may enable an entrepreneur to test the profitability of an industry without incu...

One of the main activities of regulation is the control of market development by influencing the number of firms in an industry, their entry into an industry, and their exit from an industry. Population ecology is used as a framework for explaining both the direct and indirect effects of regulatory activity on entry, exit, and market structure. This framework is then used to derive specific pro...

Using a simple two-firm, two-period model, we analyze for a developing economy the process of entrepreneurial entry, that is, entry by new firms into an industry that did not previously exist in that country, focusing on the choice between formal and informal status. Thus we explore issues such as how informality may enable an entrepreneur to test the profitability of an industry without incurr...

This paper studies a model of product variety with flexible manufacturers when, contrary to prior work, atomistic entry occurs prior to horizontal integration. In this model, more lax antitrust laws that allow for fewer and more concentrated merged firms lead to a greater extent of excess entry. Optimal policy permits no horizontal mergers when demand is perfectly inelastic, but may permit some...

An upstream manufacturer can use minimum resale price maintenance (RPM) to exclude potential competitors. RPM lets the incumbent manufacturer transfer profits to retailers. If entry is accommodated by retailers, upstream competition leads to fierce downstream competition and the breakdown of RPM. Thus, via RPM, retailers internalize the effect of accommodating entry on the incumbent’s profits. ...

This dissertation consists of three chapters in Industrial Economics. Chapter 1 is the product of joint work with Filippo Balestrieri. In chapter 1 we examine the use of lotteries among horizontal differentiated goods as a mechanism to price discriminate consumers. We use the linear city model to represent a market with two differentiated goods. We show that the optimal selling strategy for a m...

In this paper, I examine the effect of political risk on the international expansion strategies of firms in a single industry, electric power generation. I argue that due to differences in non-market capabilities, the impact of political risk will be unequal across firms, and that firms with stronger political risk-management skills will be more likely to enter higher political risk countries. ...

There is a lot of anecdotal evidence that entry of new firms reduces not only prices but also costs. However, it is far from clear how this cost-reduction works. In this paper I investigate three models of how entry may cause cost reduction: managerial incentives, survival of the fittest, and imitation. The models have somewhat different implications for social welfare.

Why does aggregate foreign direct investment (FDI) fall with distance? We conjecture that high trade costs adversely affect FDI entry decisions in a dynamic setting, even when controlling for previous export experience markets. test this hypothesis using Japanese firm-level data the period of 1995–2018, and find probability decreases distance. conclude limit firm’s ability to assess market unce...