IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v44y1996i4p389-408.html
   My bibliography  Save this article

Are Sutton's Predictions Robust?: Empirical Insights into Advertising, R&D, and Concentration

Author

Listed:
  • Robinson, William T
  • Chiang, Jeongwen

Abstract

John Sutton's (1991) widely acclaimed book on sunk costs and market structure contains several robust predictions. The authors' empirical results across exogenous and endogenous sunk cost markets support most of Sutton's robust predictions. Exogenous sunk cost markets have lower minimum values of concentration than endogenous sunk cost markets. Increasing market size reduces concentration's lower bound faster in exogenous sunk cost markets. These results indicate that the competitive escalation of endogenous sunk cost spending, from advertising or R&D, makes market entry more difficult. Other results indicate that, in relatively large markets, the competitive escalation of endogenous sunk cost spending blockades market entry. Copyright 1996 by Blackwell Publishing Ltd.

Suggested Citation

  • Robinson, William T & Chiang, Jeongwen, 1996. "Are Sutton's Predictions Robust?: Empirical Insights into Advertising, R&D, and Concentration," Journal of Industrial Economics, Wiley Blackwell, vol. 44(4), pages 389-408, December.
  • Handle: RePEc:bla:jindec:v:44:y:1996:i:4:p:389-408
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0022-1821%28199612%2944%3A4%3C389%3AASPREI%3E2.0.CO%3B2-O&origin=bc
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:44:y:1996:i:4:p:389-408. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.