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Entry-License Tax: Stackelberg versus Cournot

Sususmu Cato () and Toshihiro Matsumura ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates how leadership affects public policies in markets where the number of firms is endogenously determined. We focus on the relationship between the relative efficiency of an incumbent firm and the optimal entry tax (entry barrier). We find that this relationship depends on whether the incumbent can commit to the output before the entries of new firms. The optimal entry tax is decreasing (res. increasing) in the productivity of the incumbent when it takes (res. does not take) leadership. We also find that the optimal entry barrier occurring when the incumbent takes leadership is lower than that when it does not.

Keywords: Stackelberg; Cournot; free entry; entry tax; competition policy; beneficial concentration (search for similar items in EconPapers)
JEL-codes: L13 L41 L51 (search for similar items in EconPapers)
Date: 2013-05-01, Revised 2017-09-12
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Journal Article: Entry License Tax: Stackelberg versus Cournot (2019) Downloads
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