Note on uncertainty and socially excessive entry

Anthony Creane

International Journal of Economic Theory, 2007, vol. 3, issue 4, 329-334

Abstract: It is well known that under general conditions entry into imperfectly competitive markets is usually excessive. This note explores the effects of uncertainty on this result. Specifically, a firm that incurs entry costs might fail to successfully enter a market. In this environment, it is found that the previous conditions might not hold when there is uncertainty. That is, with uncertainty entry might be socially insufficient (instead of excessive) by more than one firm.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:bla:ijethy:v:3:y:2007:i:4:p:329-334

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