A Theory of Market Structure with Sequential Entry

B. Eaton () and Roger Ware ()

RAND Journal of Economics, 1987, vol. 18, issue 1, 1-16

Abstract: This article sets out a theory of market structure with sequential entry. We characterize the perfect Nash equilibrium to the entry game in several propositions. First, equilibria never involve excess capacity. Second, a sufficient statistic for the entry of any firm is that its profits are positive when computed myopically, i.e., with no further entry. Third, the equilibrium number of firms is the smallest number that can deter entry. Fourth, aggregate output in equilibrium is no smaller than the limit output. We calculate some explicit solutions to the model and examine comparative static properties.

Date: 1987
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819872 ... O%3B2-K&origin=repec 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:rje:randje:v:18:y:1987:i:spring:p:1-16

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().