Equilibrium Investment in an Industry with Moderate Investment Economies of Scale

Peter Hartley and Albert Kyle

Economic Journal, 1989, vol. 99, issue 396, 392-407

Abstract: The authors investigate a stationary equilibrium investment sequence in an industry where the costs of investment display initial economies of scale, but eventually decreasing returns to scale. Both the timing and size of new investments are choice variables, and they allow the industry structure to be as competitive as one could imagine given the cost conditions. The authors argue that competitive private firms will make new investments that are too early and too small. Their results have implications for the likely performance of industries, such as electricity, telecommunications, gas, and water supply, after deregulation or privatization. Copyright 1989 by Royal Economic Society.

Date: 1989
References: Add references at CitEc
Citations:

Downloads: (external link)
http://links.jstor.org/sici?sici=0013-0133%2819890 ... 0.CO%3B2-Z&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

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:ecj:econjl:v:99:y:1989:i:396:p:392-407

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().