search query: @indexterm Industrial development / total: 454
reference: 17 / 454
| Author: | Gotz, G. |
| Title: | Sunk costs, windows of profit opportunities, and the dynamics of entry |
| Journal: | International Journal of Industrial Organization
2002 : DEC, VOL. 20:10, p. 1409-1436 |
| Index terms: | INDUSTRIAL DEVELOPMENT PRODUCT LIFE CYCLE COSTS PROFIT |
| Language: | eng |
| Abstract: | This article adds two elements to a standard model of monopolistic competition. First the number of potential entrants is limited in each period and increases only over time. Second, the potential entrants differ with respect to the consumers' valuation of the variant they could offer. The resulting simple model exhibits a rich dynamic structure covering the product life cycle a path dependent equilibrium and the traditional textbook case of entry. The welfare analysis confirms the view that there cannot be too much entry. Even entry of inefficient firms improves welfare. The paper provides a substantial list of references on this subject. |
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