Social efficiency of entry in a vertically related industry
We provide a new perspective to the literature on social desirability of entry by showing that, if the input supplier has market power, social desirability of entry of the final goods producers depends on returns to scale. Entry in the final goods market can be socially insufficient under constant r...
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| Format: | Article |
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Elsevier
2016
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| Online Access: | https://eprints.nottingham.ac.uk/31592/ |
| _version_ | 1848794233496928256 |
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| author | Basak, Debasmita Mukherjee, Arijit |
| author_facet | Basak, Debasmita Mukherjee, Arijit |
| author_sort | Basak, Debasmita |
| building | Nottingham Research Data Repository |
| collection | Online Access |
| description | We provide a new perspective to the literature on social desirability of entry by showing that, if the input supplier has market power, social desirability of entry of the final goods producers depends on returns to scale. Entry in the final goods market can be socially insufficient under constant returns to scale technology, but it can be socially excessive under decreasing returns to scale technologies if the cost of entry is low so that the final goods market is sufficiently competitive. Hence, the anti-competitive entry regulation policies are more justifiable if the final goods market is characterised by decreasing returns to scale technologies. |
| first_indexed | 2025-11-14T19:12:56Z |
| format | Article |
| id | nottingham-31592 |
| institution | University of Nottingham Malaysia Campus |
| institution_category | Local University |
| last_indexed | 2025-11-14T19:12:56Z |
| publishDate | 2016 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | nottingham-315922020-05-04T20:03:58Z https://eprints.nottingham.ac.uk/31592/ Social efficiency of entry in a vertically related industry Basak, Debasmita Mukherjee, Arijit We provide a new perspective to the literature on social desirability of entry by showing that, if the input supplier has market power, social desirability of entry of the final goods producers depends on returns to scale. Entry in the final goods market can be socially insufficient under constant returns to scale technology, but it can be socially excessive under decreasing returns to scale technologies if the cost of entry is low so that the final goods market is sufficiently competitive. Hence, the anti-competitive entry regulation policies are more justifiable if the final goods market is characterised by decreasing returns to scale technologies. Elsevier 2016-02 Article PeerReviewed Basak, Debasmita and Mukherjee, Arijit (2016) Social efficiency of entry in a vertically related industry. Economics Letters, 139 . pp. 8-10. ISSN 0165-1765 Excess entry; Insufficient entry; Decreasing returns to scale http://www.sciencedirect.com/science/article/pii/S0165176515005121 doi:10.1016/j.econlet.2015.12.003 doi:10.1016/j.econlet.2015.12.003 |
| spellingShingle | Excess entry; Insufficient entry; Decreasing returns to scale Basak, Debasmita Mukherjee, Arijit Social efficiency of entry in a vertically related industry |
| title | Social efficiency of entry in a vertically related industry |
| title_full | Social efficiency of entry in a vertically related industry |
| title_fullStr | Social efficiency of entry in a vertically related industry |
| title_full_unstemmed | Social efficiency of entry in a vertically related industry |
| title_short | Social efficiency of entry in a vertically related industry |
| title_sort | social efficiency of entry in a vertically related industry |
| topic | Excess entry; Insufficient entry; Decreasing returns to scale |
| url | https://eprints.nottingham.ac.uk/31592/ https://eprints.nottingham.ac.uk/31592/ https://eprints.nottingham.ac.uk/31592/ |