The great industry gamble: market structure dynamics as a survival contest

• 成果类型: Article
• 署名作者: Toth, Aron
• 署名单位: University of Bath
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/j.1756-2171.2012.00169.x
• 发表日期: 2012
• 页码: 348-367
• 关键词: imperfect competition; entry; price; incentives; reputation; EFFICIENCY; dominance; EVOLUTION; RISK; EXIT

摘要

Industry dynamics are studied as an endogenous tournament with infinite horizon and stochastic entry. In each period, firms investments determine their probability of surviving into the next period. This generates a survival contest, which fuels market structure dynamics, while the evolution of market structure constantly redefines the contest. More concentrated markets endogenously generate less profit, rivals that are more difficult to outlive, and more entry. The unique steady-state distribution exhibits ongoing turbulence, correlated exit and entry rates, and shakeouts. The models predictions fit empirical findings in markets where firms trade off profits for smaller risk of failure (e.g., banking).