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Author(s)

Keywords

Materias Investigacion::Economía y Empresa, Free entry, Social welfare, Oligopoly

Abstract

It has been proved that in an homogeneous product industry, price over marginal costs, business stealing, set up costs and free entry imply excess entry from the welfare point of view. The proof assumes identical firms. We show by example that with non-identical firms, those conditions are compatible with insufficient entry. Besides, we provide a criterium to evaluate excess entry in industries with non-identical firms and externalities.