Arbeitspapier
A Note on the Excess Entry Theorem in Spatial Models with Elastic Demand
This paper revisits the excess entry theorem in spatial models à la Vickrey (1964) and Salop (1979) while relaxing the assumption of inelastic demand. Using a demand function with a constant demand elasticity, we show that the number of firms that enter a market decreases with the degree of demand elasticity.We find that the excess entry theorem does only hold when demand is sufficiently inelastic. Otherwise, there is insufficient entry. In the limiting case of unit elastic demand, the market is monopolized. We point out when and how a public policy can be desirable and broaden our results with a more general transportation cost function.
- ISBN
-
978-3-86788-030-5
- Sprache
-
Englisch
- Erschienen in
-
Series: Ruhr Economic Papers ; No. 33
- Klassifikation
-
Wirtschaft
Production, Pricing, and Market Structure; Size Distribution of Firms
Oligopoly and Other Imperfect Markets
- Thema
-
Elastic demand
spatial models
excess entry theorem
Raumwirtschaftstheorie
Markteintritt
Gesamtwirtschaftliche Nachfrage
Elastizität
Transportkosten
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Gu, Yiquan
Wenzel, Tobias
- Ereignis
-
Veröffentlichung
- (wer)
-
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
- (wo)
-
Essen
- (wann)
-
2007
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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Objekttyp
- Arbeitspapier
Beteiligte
- Gu, Yiquan
- Wenzel, Tobias
- Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
Entstanden
- 2007
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