Very Simple Markov-Perfect Industry Dynamics: Theory
成果类型：
Article
署名作者：
Abbring, Jaap H.; Campbell, Jeffrey R.; Tilly, Jan; Yang, Nan
署名单位：
Tilburg University; Center for Economic & Policy Research (CEPR); Federal Reserve System - USA; Federal Reserve Bank - Chicago; Tilburg University; University of Pennsylvania; National University of Singapore; National University of Singapore
刊物名称：
ECONOMETRICA
ISSN/ISSBN：
0012-9682
DOI：
10.3982/ECTA14060
发表日期：
2018
页码：
721-735
关键词：
摘要：
This paper develops a simple model of firm entry, competition, and exit in oligopolistic markets. It features toughness of competition, sunk entry costs, and market-level demand and cost shocks, but assumes that firms' expected payoffs are identical when entry and survival decisions are made. We prove that this model has an essentially unique symmetric Markov-perfect equilibrium, and we provide an algorithm for its computation. Because this algorithm only requires finding the fixed points of a finite sequence of contraction mappings, it is guaranteed to converge quickly.
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