Past empirical literature provides strong evidence that competition increases when new firms enter a market. However, rarely have economists been able to examine how competition changes with the threat of entry. This paper uses the evolution of the zip code level market structure of...

The researchers Bresnahan and Reiss (1987, 1990, and1991) proposed the use of a firm's entry threshold ratio as a means ofmeasuring variance in a firm's competitive conduct as competition increaseswithin the industry. Building on the aforementioned research, this studyutilizes the entry and exit...