Two Rationales for Insufficient Entry-Reference-Cited by-同舟云学术

Two Rationales for Insufficient Entry

Published:2019-06-11 Issue:1 Volume:20 Page:
ISSN:1935-1704
Container-title:The B.E. Journal of Theoretical Economics
language:en
Short-container-title:

Author:

Chen Linfeng¹,Li Tan²,Qian Bing²

Affiliation:

1. School of Economics and Management , Changzhou Institute of Technology, CZ Reform and Development of Entrepreneurship and Innovation & Research Center , Changzhou , Jiangsu, 213032 , China

2. School of Economics and Management , Changzhou Institute of Technology , Changzhou , Jiangsu, 213032 , China

Abstract

Abstract This study offers two new rationales for insufficient entry in a given industry. The first is the presence of complementary industries. Suppose there is free entry in an industry and the complementary industries are monopolistic. If the number of complementary industries is sufficiently high, then there is insufficient entry. However, if these industries are substitutes, then there is always excessive entry. The second rationale is that there is cost-reducing R&D investment and spillover. When the spillover rate is sufficiently high, there is insufficient entry. Further, we consider the general model and obtain similar results.

Publisher

Walter de Gruyter GmbH

Subject

General Economics, Econometrics and Finance

Link

https://www.degruyter.com/document/doi/10.1515/bejte-2018-0054/pdf

Reference24 articles.

1. Atallah, G. 2005. “R&D Cooperation with Asymmetric Spillovers.” Canadian Journal of Economics 38: 919–36.

2. Bourreau, M., and M. Verdier. 2014. “Cooperative and Noncooperative R&D in Two-Sided Markets.” Review of Network Economics 13: 175–90.

3. Cellini, R., and L. Lambertini. 2009. “Dynamic R&D with Spillovers: Competition vs Cooperation.” Journal of Economic Dynamics & Control 33: 568–82.

4. Crampes, C., C. Haritchabalet, and B. Jullien. 2009. “Advertising, Competition and Entry in Media Industries.” Journal of Industrial Economics 57 (1): 7–31.

5. d’Aspremont, C., and A. Jacquemin. 1988. “Cooperative and Noncooperative R&D in Duopoly with Spillovers.” American Economic Review 78: 1133–37.

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