Assessing excess profits from different entry regulations

Joan-Ramon Borrell and Laura Fernández-Villadangos ()
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Laura Fernández-Villadangos: PPRE-IREA, Universitat de Barcelona

No XREAP2009-03, Working Papers from Xarxa de Referència en Economia Aplicada (XREAP)

Abstract: Entry regulations affecting professional services such as pharmacies are common practice in many European countries. We assess the impact of entry regulations on profits estimating a structural model of entry using the information provided by a policy experiment. We use the case of different regional policies governing the opening of new pharmacies in Spain to show that structural models of entry ought to be estimated with data from policy experiments to pin down how entry regulations change payoffs functions of the incumbents. Contrary to the public interest rationales, regulations are not boosting only small town pharmacies payoffs nor increasing all pharmacies payoffs alike. The gains from regulations are very unevenly distributed,suggesting that private interests are shaping the current mix of entry and markup regulations.

Keywords: Entry; regulation; professional services (search for similar items in EconPapers)
JEL-codes: H51 I18 L51 L84 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2009-04, Revised 2009-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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http://www.xreap.cat/RePEc/xrp/pdf/XREAP2009-3.pdf First version, 2009 (application/pdf)
http://www.xreap.cat/RePEc/xrp/pdf/XREAP2009-3.pdf Revised version, 2009 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:xrp:wpaper:xreap2009-03

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