Preferences, entry, and market structure

Empirical Models of Entry and Market Structure

This chapter surveys empirical models of market structure. We pay particular attention to equilibrium models that interpret cross-sectional variation in the number of firms or firm turnover rates. We begin by discussing what economists can in principle learn from models with homogeneous potential entrants. We then turn to models with heterogeneous firms. In the process, we review applications t...

Market Structure and Entry: Where's the Beef?

We study the effects of market structure on entry using data from the UK fast food (counter-service burger) industry over the years 1991-1995. Over this period, the market can be characterized as a duopoly. We find that market structure matters greatly: for both firms, rival presence increases the probability of entry. We control for market specific time-invariant unobservables and their correl...

Demand shifts and market structure in free-entry oligopoly equilibria

This papers examines the structural implications of demand shifts in free-entry oligopoly equilibria. The model generalizes the conjectural variations framework to consider asymmetric firm conjectures, allows for the possibility of cost differences across firms, and endogenizes conditions of entry and exit in the industry. In non-competitive environments, changes in incumbent output and industr...

Market Structure and Price Adjustment in the Iranian Tea Market

Market power , efficiencies , and entry :

We investigate the competitive effects of the merger between Delta Air Lines and Northwest Airlines (2009) in the domestic U.S. airline industry. Applying fixed effects regression models we find that the transaction led to short term price increases of about 11 percent on overlapping routes and about 10 percent on routes which experienced a merger-induced switch of the operating carrier. Over a...