Investment dynamics in markets with endogenous demand

Nikolaos Vettas ()

Journal of Industrial Economics, 2000, vol. 48, issue 2, 189-203

Abstract: I examine entry into markets where demand is an increasing function of past sales because of learning, networks, or fashion. Demand is initially unknown (with firms learning in Bayesian fashion) and grows endogenously over time. The competitive expansion path and the efficient/monopoly solution differ not only with respect to levels (the market’s investment is too low), but also time patterns: externalities contribute to S‐shaped diffusion. There is also path‐dependence: small initial differences may determine whether the market will grow or not open. Policy arguments for subsidizing entry into new markets, especially in infant export industries, are examined.

Date: 2000
References: Add references at CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
https://doi.org/10.1111/1467-6451.00118

Related works:
Working Paper: Investment Dynamics in Markets with Endogenous Demand (1999)
Working Paper: Investment Dynamics in Markets with Endogenous Demand (1998)
Working Paper: Investment Dynamics in Markets with Endogenous Demand (1996)
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:bla:jindec:v:48:y:2000:i:2:p:189-203

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().