The Effects of Market Structure on Industry Growth: Rivalrous Non-excludable Capital

Christos Koulovatianos and Leonard Mirman

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so firms influence the evolution of the capital equipment through more or less intensive supply in the final-goods market. Strategic incentives stem from, (i) a dynamic externality, arising due to the non-excludability of the capital stock, leading firms to compete for its use (rivalry), and, (ii) a market externality, leading to the classic Cournot-type supply competition. Comparing alternative market structures, we isolate the effect of these externalities on strategies and industry growth.

JEL-codes: D43 D92 L13 O12 Q20 (search for similar items in EconPapers)
Date: 2005-01
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Journal Article: The effects of market structure on industry growth: Rivalrous non-excludable capital (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:vie:viennp:vie0501

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