Authors

• Francisco Galera(fgalera@unav.es)
  School of Economics and Business Administration, University of Navarra
• Isabel Rodríguez-Tejedo(isabelrt@unav.es)
  School of Economics and Business Administration, University of Navarra
• Juan C. Molero(jcmolero@unav.es)
  School of Economics and Business Administration, University of Navarra

Abstract
It has been proved that in an homogeneous product industry, price over marginal costs, business stealing, set up costs and free entry imply excess entry from the welfare point of view. The proof assumes identical firms. We show by example that with non-identical firms, those conditions are compatible with insufficient entry. Besides, we provide a criterion to evaluate excess entry in industries with non-identical firms and externalities.

Classification JEL:D24, D43, L13

Keywords:Free entry, Social welfare, Oligopoly

Number of Pages:16

Creation Date:2012-11-13

Number:null/12