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Author: John Sutton Publisher: MIT Press ISBN: 9780262193054 Category : Business & Economics Languages : en Pages : 600
Book Description
Sunk Costs and Market Structure bridges the gap between the new generation of game theoretic models that has dominated the industrial organization literature over the past ten years and the traditional empirical agenda of the subject as embodied in the structure-conduct-performance paradigm developed by Joe S. Bain and his successors.
Author: John Sutton Publisher: MIT Press ISBN: 9780262193054 Category : Business & Economics Languages : en Pages : 600
Book Description
Sunk Costs and Market Structure bridges the gap between the new generation of game theoretic models that has dominated the industrial organization literature over the past ten years and the traditional empirical agenda of the subject as embodied in the structure-conduct-performance paradigm developed by Joe S. Bain and his successors.
Author: Pietro F. Peretto Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
I discuss a model of endogenous innovation that brings to the forefront the in-house R&D activity of the modern corporation. In a symmetric oligopoly, firms undertake cost-reducing R&D subject to a research technology with incomplete spillovers. Concentration of sales and R&D resources determine the optimal scale and the efficiency of firms' R&D operations and, thus, the rate of productivity growth. In addition, R&D expenditures (a sunk cost) are one component of total fixed costs and determine the number of active firms in zero-profit equilibrium. This feed-back makes the price, investment, entry, and exit decisions interdependent. A rich characterization of the balanced growth path, defined as the rate of growth and the number of firms that the market supports in general equilibrium, emerges. Multiple equilibria may exist and firms' expectations about rivalry determine the economy's performance.
Author: David VanHoose Publisher: Springer Nature ISBN: 3031162412 Category : Business & Economics Languages : en Pages : 285
Book Description
This book provides an evaluation of the industrial organization of banking with a focus on the interrelationship among bank behavior, market structure, and regulation. It addresses a wide range of public policy topics, including bank competition and risk, international banking, antitrust issues, and capital regulation. New to this edition, which has been updated throughout, is a broadened consideration of alternative theories of competition among banks, which includes discussions of such issues as the implications of large increases in bank reserve holdings in recent years, effects of nonprice competition through quality rivalry, analysis of mixed market structures involving both large and small banks, and international interactions of banks and policymakers. The intent of the book is to serve as a learning tool and reference for graduate students, academics, bankers, and policymakers seeking to better understand the industrial organization of the banking sector and the effects of banking regulations.
Author: Victor J. Tremblay Publisher: Springer Science & Business Media ISBN: 1461432413 Category : Business & Economics Languages : en Pages : 820
Book Description
This book covers the main topics that students need to learn in a course on Industrial Organization. It reviews the classic models and important empirical evidence related to the field. However, it will differ from prior textbooks in two ways. First, this book incorporates contributions from behavioral economics and neuroeconomics, providing the reader with a richer understanding of consumer preferences and the motivation for many of the business practices we see today. The book discusses how firms exploit consumers who are prone to making mistakes and who suffer from cognitive dissonance, attention lapses, and bounded rationality, for example and will help explain why firms invest in persuasive advertising, offer 30-day free trials, offer money-back guarantees, and engage in other observed phenomena that cannot be explained by the traditional approaches to industrial organization. A second difference is that this book achieves a balance between textbooks that emphasize formal modeling and those that emphasize the history of the field, empirical evidence, case studies, and policy analysis. This text puts more emphasis on the micro-foundations (i.e., consumer and producer theory), classic game theoretic models, and recent contributions from behavioral economics that are pertinent to industrial organization. Each topic will begin with a discussion of relevant theory and models and will also include a discussion of concrete examples, empirical evidence, and evidence from case studies. This will provide students with a deeper understanding of firm and consumer behavior, of the factors that influence market structure and economic performance, and of policy issues involving imperfectly competitive markets. The book is intended to be a textbook for graduate students, MBAs and upper-level undergraduates and will use examples, graphical analysis, algebra, and simple calculus to explain important ideas and theories in industrial organization.
Author: Don E. Waldman Publisher: Routledge ISBN: 1315510529 Category : Business & Economics Languages : en Pages : 758
Book Description
Written solely for the undergraduate audience, Industrial Organization: Theory and Practice, which features early coverage of Antitrust, punctuates its modern introduction to industrial organization with relevant empirical data and case studies to show students how to apply theoretical tools.
Author: Robert Waschik Publisher: Routledge ISBN: 1135154961 Category : Business & Economics Languages : en Pages : 401
Book Description
This second edition of a successful textbook builds on the solid grounding of the previous edition and its introduction of the key pillars of game theory into managerial decision-making. Taking an international perspective, the book reflects cutting edge developments in economics such as behavioural economics and auction theory and shows how these can be applied in the workplace.
Author: Daniel R. Shiman Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
To explain why many manufacturing industries have remained highly concentrated, John Sutton has developed a new theory of endogenous sunk costs which predicts that industries with significant endogenous sunk costs will have a lower bound on concentration even as industry demand increases. Endogenous sunk costs are fixed costs that firms can choose to invest in, which affect the price-cost margin of a firm. Any optional fixed investments in quality, advertising, and cost-reducing plant, that allow the firm to raise its price or lower its variable costs, qualify as endogenous sunk costs. This paper cuts through the mathematical complexity of the model and examines the intuition behind the theory, to provide a better understanding of how and when the theory of endogenous sunk costs can be applied, and its limitations. How the incentive for firms to invest in endogenous sunk costs increases as the market expands, and how this can limit the number of firms that can profitably remain in the market, is discussed. The paper examines the key conditions required for this effect, and shows how the same basic results can be obtained even if some of Sutton's assumptions are relaxed. It also examines the reasons for the model's unusual result that in some circumstances, a market expansion can actually induce a reduction in the number of firms, contrary to the usual expectation in industrial organization theory. A proof is provided of the proposition that concentration is bounded below for the Cournot model. The paper then discusses how endogenous sunk costs are likely to have a significant impact on industrial development in ways that Sutton did not discuss, for example when firms have a choice of variable cost-reducing investments.
Author: John Sutton
Author: Catherine Matraves
Author: John Sutton
Author: Vivek Ghosal
Author: Avner Shaked
Author: Pietro F. Peretto
Author: David VanHoose
Author: Victor J. Tremblay
Author: Don E. Waldman
Author: Robert Waschik
Author: Daniel R. Shiman