Sunk Costs and Antitrust Barriers to Entry
US antitrust policy takes as its objective consumer welfare, not total economic welfare. With that objective, Joe Bain's definition of entry barriers is more useful than George Stigler's or definitions based on economic welfare. It follows that economies of scale that involve sunk costs ma...
| Main Author: | |
|---|---|
| Format: | Working Paper |
| Language: | en_US |
| Published: |
2004
|
| Subjects: | |
| Online Access: | http://hdl.handle.net/1721.1/5060 |
| _version_ | 1826195930597031936 |
|---|---|
| author | Schmalensee, Richard |
| author_facet | Schmalensee, Richard |
| author_sort | Schmalensee, Richard |
| collection | MIT |
| description | US antitrust policy takes as its objective consumer welfare, not total economic welfare. With that objective, Joe Bain's definition of entry barriers is more useful than George Stigler's or definitions based on economic welfare. It follows that economies of scale that involve sunk costs may create antitrust barriers to entry. A simple model shows that sunk costs without scale economies may discourage entry without creating an antitrust entry barrier. |
| first_indexed | 2024-09-23T10:18:04Z |
| format | Working Paper |
| id | mit-1721.1/5060 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T10:18:04Z |
| publishDate | 2004 |
| record_format | dspace |
| spelling | mit-1721.1/50602019-04-12T08:22:41Z Sunk Costs and Antitrust Barriers to Entry Schmalensee, Richard antitrust U.S. antitrust policy entry barriers US antitrust policy takes as its objective consumer welfare, not total economic welfare. With that objective, Joe Bain's definition of entry barriers is more useful than George Stigler's or definitions based on economic welfare. It follows that economies of scale that involve sunk costs may create antitrust barriers to entry. A simple model shows that sunk costs without scale economies may discourage entry without creating an antitrust entry barrier. 2004-04-02T20:19:22Z 2004-04-02T20:19:22Z 2004-04-02T20:19:22Z Working Paper http://hdl.handle.net/1721.1/5060 en_US MIT Sloan School of Management Working Paper;4457-04 194770 bytes application/pdf application/pdf |
| spellingShingle | antitrust U.S. antitrust policy entry barriers Schmalensee, Richard Sunk Costs and Antitrust Barriers to Entry |
| title | Sunk Costs and Antitrust Barriers to Entry |
| title_full | Sunk Costs and Antitrust Barriers to Entry |
| title_fullStr | Sunk Costs and Antitrust Barriers to Entry |
| title_full_unstemmed | Sunk Costs and Antitrust Barriers to Entry |
| title_short | Sunk Costs and Antitrust Barriers to Entry |
| title_sort | sunk costs and antitrust barriers to entry |
| topic | antitrust U.S. antitrust policy entry barriers |
| url | http://hdl.handle.net/1721.1/5060 |
| work_keys_str_mv | AT schmalenseerichard sunkcostsandantitrustbarrierstoentry |