Contestability and the Indeterminacy of Free Entry Equilibria

Claude d'Aspremont, Rodolphe Dos Santos Ferreira and Louis-André Gérard-Varet

G.R.E.Q.A.M. from Universite Aix-Marseille III

Abstract: This note illustrates the fact that the number of active firms in free entry equilibrium may be largely indeterminate and different levels of positive profits may in many cases be sustained. This is shown to be true, in spite of market contestability, either under Cournot competition or under product differentiation. Examples are given for both cases. Appropriate conditions of increasing returns are required.

Keywords: OLIGOPOLIES; GENERAL EQUILIBRIUM (search for similar items in EconPapers)
JEL-codes: D40 D43 D50 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1996
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Contestability and the Indeterminacy of Free-Entry Equilibria (2000)
Working Paper: Contestability and the indeterminacy of free-entry equilibria (2000)
Working Paper: Contestability and the indeterminacy of free entry equilibria (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:aixmeq:96a16

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