Download full text
(420.8Kb)
Citation Suggestion
Please use the following Persistent Identifier (PID) to cite this document:
https://nbn-resolving.org/urn:nbn:de:0168-ssoar-277422
Exports for your reference manager
Entry and market selection of firms: a laboratory study
[journal article]
Abstract We study how markets adjust to the entry of new firms under different conditions. Two incumbents face entry by three other firms. When firms' costs are equal, entry always leads consumer surplus and profits to their equilibrium levels. When entrants are more efficient than incumbents, entry leads co... view more
We study how markets adjust to the entry of new firms under different conditions. Two incumbents face entry by three other firms. When firms' costs are equal, entry always leads consumer surplus and profits to their equilibrium levels. When entrants are more efficient than incumbents, entry leads consumer surplus to equilibrium. With cost asymmetries, market behavior is satisfactory from the consumers’ standpoint but does not yield adequate signals to other potential entrants. Simultaneous entry is in the short run more favorable to consumers than sequential entry. A longer incumbency phase favors consumers after entry.... view less
Classification
Management Science
Political Economy
Free Keywords
Market selection; Imperfect competititon; Entry; Experiments; C09; C72; D43; D83; L13
Document language
English
Publication Year
2008
Page/Pages
p. 593-612
Journal
Journal of Economic Behavior & Organization, 68 (2008) 3-4
DOI
https://doi.org/10.1016/j.jebo.2008.06.012
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)