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Note on uncertainty and socially excessive entry

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  • Anthony Creane

Abstract

It is well known that under general conditions entry into imperfectly competitive markets is usually excessive. This note explores the effects of uncertainty on this result. Specifically, a firm that incurs entry costs might fail to successfully enter a market. In this environment, it is found that the previous conditions might not hold when there is uncertainty. That is, with uncertainty entry might be socially insufficient (instead of excessive) by more than one firm.

Suggested Citation

  • Anthony Creane, 2007. "Note on uncertainty and socially excessive entry," International Journal of Economic Theory, The International Society for Economic Theory, vol. 3(4), pages 329-334, December.
    • Handle: RePEc:bla:ijethy:v:3:y:2007:i:4:p:329-334
    DOI: 10.1111/j.1742-7363.2007.00063.x
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    References listed on IDEAS

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    7. Herman C. Quirmbach, 1993. "R&D: Competition, Risk, and Performance," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 157-197, Summer.
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    Cited by:

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    2. Marco Alderighi & Claudio A. Piga, 2008. "The Circular City with Heterogenous Firms," Working Paper series 16_08, Rimini Centre for Economic Analysis.
    3. Laszlo Goerke, 2022. "Partisan competition authorities, Cournot‐oligopoly, and endogenous market structure," Southern Economic Journal, John Wiley & Sons, vol. 89(1), pages 238-270, July.
    4. Keisuke Hattori & Takeshi Yoshikawa, 2016. "Free entry and social inefficiency under co-opetition," Journal of Economics, Springer, vol. 118(2), pages 97-119, June.
    5. Marco de Pinto & Laszlo Goerke, 2022. "Cost uncertainty in an oligopoly with endogenous entry," Bulletin of Economic Research, Wiley Blackwell, vol. 74(4), pages 927-948, October.
    6. Tian Wu & Bohan Zeng & Yali He & Xin Tian & Xunmin Ou, 2017. "Sustainable Governance for the Opened Electric Vehicle Charging and Upgraded Facilities Market," Sustainability, MDPI, vol. 9(11), pages 1-22, November.
    7. Makoto Yano, 2009. "The Foundation Of Market Quality Economics," The Japanese Economic Review, Japanese Economic Association, vol. 60(1), pages 1-32, March.
    8. Laszlo Goerke, 2022. "Endogenous Market Structure and Partisan Competition Authorities," IAAEU Discussion Papers 202201, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    9. Fraser Summerfield, 2016. "Matching Skill and Tasks: Cyclical Fluctuations in the Overqualification of New Hires," Working Paper series 16-08, Rimini Centre for Economic Analysis.
    10. Raúl Bajo‐Buenestado, 2023. "Efficient regulated entry in competitive markets with demand uncertainty," International Journal of Economic Theory, The International Society for Economic Theory, vol. 19(2), pages 413-422, June.
    11. Sarang Deo & Charles J. Corbett, 2009. "Cournot Competition Under Yield Uncertainty: The Case of the U.S. Influenza Vaccine Market," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 563-576, July.

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