Exit, Sunk Costs and the Selection of Firms

Paolo Giorgio Garella () and Y Richelle

ASSET - Instituto De Economia Publica from ASSET (Association of Southern European Economic Theorists)

Abstract: This paper aims to identify the cost characteristics of existing firms whenever firms are playing an infinite horizon supergame. Recognizing that, with more than two firms, the problem of which firms exit is quite similar to a coalition formation one, we associate to this supergame a game in coalitional form and obtain a prediction on the firm which are the more likly to stay out of the market by using the concept of a stable coalition structure.

Keywords: ECONOMETRICS (search for similar items in EconPapers)
JEL-codes: C7 (search for similar items in EconPapers)
Date: 1997

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Related works:
Working Paper: Exit, Sunk Costs and the Selection of Firms (1995)
Journal Article: Exit, sunk costs and the selection of firms (1999)
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