Cutler, David M.; Huckman, Robert S.; Kolstad, Jonathan T. - National Bureau of Economic Research (NBER) - 2009
Prior studies suggest that, with elastically supplied inputs, free entry may lead to an inefficiently high number of … firms in equilibrium. Under input scarcity, however, the welfare loss from free entry is reduced. Further, free entry may … increase use of high-quality inputs, as oligopolistic firms underuse these inputs when entry is constrained. We assess these …