This paper revisits the optimal entry decision in a differentiated product market where customer demand is price-sensitive and depends on a per-unit transport cost. We show that too few firms may enter for high entry cost and high transport cost compared to the socially optimal outcome.

We consider market dynamics in a reduced form model. In the simplest version, there are two investors and several small noninvesting firms. In each period, one investor can acquire a small firm, the other investor decides about market entry. After that all firms play an oligopoly game. We derive...

In many industries firms can enter into new markets either by building a new plant (greenfield entry) or by acquiring an existing incumbent facility. The structural empirical literature on entry has usually ignored acquisitions as an option for entrants. Understanding what drives this decision...

This paper estimates a dynamic, structural model of entry and exit in an oligopolistic industry and uses it to quantify the determinants of market structure and long-run firm values for two U.S. service industries, dentists and chiropractors. Entry costs faced by potential entrants, fixed costs...

This paper presents an estimable dynamic structural model of an oligopoly retail industry. The model can be estimated using panel data of local retail markets with information on new entries, exits and the size and growth of incumbent firms. In our model, retail firms are vertically and...

Liberalization in telecommunications has led to market competition even at local telephony level. This article deals with a competitor's decision to enter the market, with the later competition in prices, and with the consumers' decision to choose their provider. We assume a deregulated market...

Generic drugs play an important role in disciplining drug prices and controlling rising drug costs. However, the effect that an additional generic drug competitor has on drug prices is difficult to measure because the number of firms competing in a market is endogenously determined. We identify...

This paper proposes a dynamic structural model with endogenous productivity to evaluate the impact of R&D on productivity when firms decide how much to invest; this decision depends on the competitive pressure that they face. Using data from Sweden, this paper finds that open market policies and...

We examine the effects of overlapping ownership in a Cournot oligopoly with free entry. If firms develop overlapping ownership only after entering, then an increase in the degree of overlapping ownership spurs entry but causes price to increase and total surplus to fall. Also, entry is never...