Past empirical literature provides strong evidence that competitionincreases when new firms enter a market. However, rarely have economistsbeen able to examine how competition changes with the threat of entry.This paper uses the evolution of the zip code level market structure offacilities-based...

This paper examines how manager and firm characteristics relate to entrydecisions in US local telephone markets. To do so, it develops astructural econometric model that allows managers to be heterogeneous intheir ability to correctly conjecture competitor behavior. The modeladapts Camerer, Ho,...