Research

Profit, Entry and Changes in Concentration

The simultaneity between profit, entry, and changes in concentration is examined. The sample includes 481 observations on 4-digit industries over the years 1972–1977 and 1977–1982. Results show that profits respond positively to entry barriers and initial concentration. Net entry responds positively to initial profits and responds negatively to entry barriers. Concentration moves toward its steady-state level, but the rate of adjustment is very slow. The competitive process, left on its own, does not seem to move quickly toward equilibrium.

Publication Information
Article Title: Profit, Entry and Changes in Concentration
Journal: International Journal of Industrial Organization (1993)
v. 11 iss. 2 pp. 185-204
Author(s): Rosenbaum, David I
Researcher Information
    
Rosenbaum, David I
Rosenbaum, David I
Associate Director of the Bureau of Business Research,
Expertise:
  • Forensic Economics
  • Applied Microeconomics
  • Cost-Benefit Analysis
Economics
CoB 525 J
P.O. Box 880489
University of Nebraska-Lincoln
Lincoln, NE 68588-0489, USA
Phone: (402) 472-2318
Fax: (402) 472-9700
drosenbaum1@unl.edu