Entry, exit, and the determinants of market structure

• 成果类型: Article
• 署名作者: Dunne, Timothy; Klimek, Shawn D.; Roberts, Mark J.; Xu, Daniel Yi
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Atlanta; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Duke University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12027
• 发表日期: 2013
• 页码: 462-487
• 关键词: industry; COMPETITION; models; areas; games; care

摘要

This article estimates a dynamic, structural model of entry and exit for two US service industries: dentists and chiropractors. Entry costs faced by potential entrants, fixed costs faced by incumbent producers, and the toughness of short-run price competition are important determinants of long-run firm values, firm turnover, and market structure. In the dentist industry entry costs were subsidized in geographic markets designated as Health Professional Shortage Areas (HPSA) and the estimated mean entry cost is 11 percent lower in these markets. Using simulations, we find that entry cost subsidies are less expensive per additional firm than fixed cost subsidies.