Endogenous Market Structures and Innovation

Federico Etro ()

No 2010_29, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: One of the pioneering works on endogenous market structures, by Tandon (1984), has extended the standard Cournot model with linear demand to endogenous entry and sunk R&D costs to show that the endogenous number of firms is independent from the size of the market. I generalize the model in many directions and show that, as long as the exogenous fixed costs are positive, the endogenous market structure is naturally characterized by an inverted-U relation between market size and number of firms, in line with the celebrated hypothesis of Sutton (1991).

Keywords: Oligopoly; Endogenous entry; Sunk costs; RD investment (search for similar items in EconPapers)
JEL-codes: L1 (search for similar items in EconPapers)
Pages: 13
Date: 2010
New Economics Papers: this item is included in nep-bec, nep-com, nep-ent, nep-ind, nep-ino and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.unive.it/web/fileadmin/user_upload/dip ... P_DSE_etro_29_10.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2010_29

Access Statistics for this paper

More papers in Working Papers from Department of Economics, University of Venice "Ca' Foscari" Contact information at EDIRC.
Bibliographic data for series maintained by Sassano Sonia ().