Xiao, Mo; Orazem, Peter F. - Iowa State University of Science and Technology <Ames, … - 2006
We extend Bresnahan and Reiss’s (1991) model of local oligopoly to allow firm entry and exit over time.In our framework, entrants have to incur sunk costs in order to enter a market. After becomingincumbents, they disregard these entry costs in deciding whether to continue operating or to...