search query: @author Garella, P. / total: 5
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| Author: | Garella, P. Richelle, Y. |
| Title: | Exit, sunk costs, and the selection of firms |
| Journal: | Economic Theory
1999 : VOL. 13:3, p. 643-670 |
| Index terms: | EXIT CONDITIONS SUNK COSTS COMPANIES |
| Language: | eng |
| Abstract: | This paper aims to identify the cost characteristics of existing firms whenever firms are playing an infinite horizon supergame with time-invariant cost and demand functions. With more than two firms, the problem of which firms exit is quite similar to a coalition formation one. Solving this coalition formation problem, the authors obtain that the existing firms are those with higher average cost functions whenever reentry is costless while, whenever reentry is unprofitable, the existing firms are those with lower marginal cost functions. |
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