Abstract

http://ssrn.com/abstract=2339052
 


 



Entry Regulations, Product Differentiation and Determinants of Market Structure


Florin Maican


University of Gothenburg, Department of Economics; Research Institute of Industrial Economics (IFN)

Matilda Orth


Research Institute of Industrial Economics (IFN), Stockholm

July 23, 2014

IFN Working Paper No. 984

Abstract:     
We use a dynamic oligopoly model of entry and exit with store-type differentiation to evaluate how entry regulations affect profitability and market structure in retail. Based on unique data for all retail food stores in Sweden, we find different cost structures and asymmetric competition across store types. Two additional small stores correspond to the same decrease in a small store's long-run profits as one large store. A number of counterfactual experiments that target the entry of different store types and markets with various degrees of regulation provide rich information for policymakers concerning the effect of regulations on market structure dynamics.

Number of Pages in PDF File: 88

Keywords: Imperfect competition, Product differentiation, Retail markets, Entry, Exit, Sunk costs

JEL Classification: L11, L13, L81

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Date posted: October 12, 2013 ; Last revised: December 12, 2014

Suggested Citation

Maican, Florin and Orth, Matilda, Entry Regulations, Product Differentiation and Determinants of Market Structure (July 23, 2014). IFN Working Paper No. 984. Available at SSRN: http://ssrn.com/abstract=2339052 or http://dx.doi.org/10.2139/ssrn.2339052

Contact Information

Florin Maican
University of Gothenburg, Department of Economics ( email )
Box 640
Goteborg
Sweden
HOME PAGE: http://sites.google.com/site/maicanfg/
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
Matilda Orth (Contact Author)
Research Institute of Industrial Economics (IFN), Stockholm ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
HOME PAGE: http://www.ifn.se/matildao
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