Entry and market selection of firms: a laboratory study

Journal article | Zeitschriftenartikel

We study how markets adjust to the entry of new firms under different conditions. Two incumbents face entry by three other firms. When firms' costs are equal, entry always leads consumer surplus and profits to their equilibrium levels. When entrants are more efficient than incumbents, entry leads consumer surplus to equilibrium. With cost asymmetries, market behavior is satisfactory from the consumers’ standpoint but does not yield adequate signals to other potential entrants. Simultaneous entry is in the short run more favorable to consumers than sequential entry. A longer incumbency phase favors consumers after entry.

Object Details

• Extent: Seite(n): 593-612
• Language: Englisch
• Notes: Status: Postprint; begutachtet (peer reviewed)

References and Relationships

• Bibliographic citation: Journal of Economic Behavior & Organization, 68(3-4)

Classification and Topics

• Subject: Wirtschaft ; Management ; Volkswirtschaftslehre

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brandts, Jordi ; Giritligil, Ayça Ebru
• Event: Veröffentlichung
• (where): Niederlande
• (when): 2008

Further information

• DOI: https://doi.org/10.1016/j.jebo.2008.06.012
• URN: urn:nbn:de:0168-ssoar-277422
• Rights: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Last update: 21.06.2024, 4:26 PM CEST