Entry, Exit, and the Endogenous Market Structure in Technologically Turbulent Industries
Cleveland State University - Economics
Eastern Economic Journal, Vol. 37, Issue 1, pp. 51-84, 2011
Empirical studies have found high correlation between entry and exit across industries, indicating that industries differ substantially in their degree of firm turnover. I propose a computational model of dynamic oligopoly with entry and exit in a turbulent technological environment. I examine how industry-specific factors give rise to across-industries differences in turnover. An analysis of the endogenous relationships between firm turnover, industry concentration, and the performance variables shows: (1) the rate of turnover and industry concentration are positively related; (2) industry concentration and market price are positively related; (3) no general relationship exists between industry concentration and price-cost margin.
Number of Pages in PDF File: 34
Date posted: January 5, 2011