Sunk Costs and Concentration in Homogeneous Product Industries

Published Online:https://doi.org/10.1287/stsc.2022.0159

References

  • Arora A, Gambardella A (1998) Evolution of industry structure in the chemical industry. Arora A, Landau R, Rosenberg N, eds. Chemicals and Long-Term Economic Growth (Wiley, New York), 379–414.Google Scholar
  • Arora A, Fosfuri A, Gambardella A (2004) Markets for Technology: The Economics of Innovation and Corporate Strategy (MIT Press, Cambridge, MA).Google Scholar
  • Bresnahan TF, Reiss PC (1990) Entry in monopoly markets. Rev. Econom. Stud. 57(4):531–553.CrossrefGoogle Scholar
  • Bresnahan TF, Reiss PC (1991) Entry and competition in concentrated markets. J. Political Econom. 99(5):977–1009.CrossrefGoogle Scholar
  • Cabral L (1997) Entry mistakes. Discussion Paper #1729, Center for Economic Policy Research, London.Google Scholar
  • Cabral L, Ross TW (2008) Are sunk costs a barrier to entry? J. Econom. Management Strategy 17(1):97–112.CrossrefGoogle Scholar
  • Cookson JA (2018) Anticipated entry and entry deterrence: Evidence from the American casino industry. Management Sci. 64(5):2325–2344.LinkGoogle Scholar
  • Dixit AK (1980) The role of investment in entry-deterrence. Econom. J. 90(357):95–106.Google Scholar
  • Dixit AK (1989) Entry and exit decisions under uncertainty. J. Political Econom. 97(3):620–638.CrossrefGoogle Scholar
  • Dixit AK (1992) Investment and hysteresis. J. Econom. Perspect. 6(1):107–132.CrossrefGoogle Scholar
  • Dixit AK, Pindyck RS (1994) Investment Under Uncertainty (Princeton University Press, Princeton, NJ).CrossrefGoogle Scholar
  • Dixit AK, Shapiro C (1986) Entry dynamics with mixed strategies. Thomas L, ed. The Economics of Strategic Planning (Lexington Books, Lexington, MA), 63–79.Google Scholar
  • Eaton BC, Lipsey R (1981) Capital, commitment and entry equilibrium. Bell J. Econom. 12(2):593–604.CrossrefGoogle Scholar
  • Eaton BC, Ware R (1987) A theory of market structure with sequential entry. RAND J. Econom. 18(1):1–16.CrossrefGoogle Scholar
  • Food and Drug Administration (2019) Drug shortages: Root causes and potential solutions. Accessed April 19, 2022, https://www.fda.gov/media/131130/download.Google Scholar
  • Fudenberg D, Tirole J (1983) Capital as a commitment: Strategic investment to deter mobility. J. Econom. Theory 31(2):227–250.CrossrefGoogle Scholar
  • Ghemawat P (1984) Capacity expansion in the titanium dioxide industry. J. Indust. Econom. 33(2):145–163.CrossrefGoogle Scholar
  • Ghemawat P (1987) Investment in lumpy capacity. J. Econom. Behav. Organ. 8(2):265–277.CrossrefGoogle Scholar
  • Ghemawat P (1991) Commitment: The Dynamic of Strategy (Free Press, New York).Google Scholar
  • Ghemawat P, Caves RE (1986) Capital commitment and profitability: An empirical investigation. Oxford Econom. Papers 38:94–110.CrossrefGoogle Scholar
  • Gilbert RJ, Lieberman M (1987) Investment and coordination in oligopolistic industries. RAND J. Econom. 18(1):17–33.CrossrefGoogle Scholar
  • Hause JC, du Rietz G (1984) Entry, industry growth, and the microdynamics of industry supply. J. Political Econom. 9(4):733–757.CrossrefGoogle Scholar
  • Heavy & Chemical Industries News Agency of Japan (1977, 1989) Annual Survey of Petrochemical Industries in Japan (Jukagaku Kogyo Tsushin-sha, Nihon no Sekiyu Kagaku Kogyo, in Japanese) (The Heavy & Chemical Industries News Agency, Tokyo).Google Scholar
  • Hortaçsu A, Syverson C (2007) Cementing relationships: Vertical integration, foreclosure, productivity, and prices. J. Political Econom. 115(2):250–301.CrossrefGoogle Scholar
  • Lieberman MB (1984) The learning-curve and pricing in the chemical-processing industries. RAND J. Econom. 15(2):213–228.CrossrefGoogle Scholar
  • Lieberman MB (1987a) Excess capacity as a barrier to entry: An empirical appraisal. J. Indust. Econom. 35(4):607–627.CrossrefGoogle Scholar
  • Lieberman MB (1987b) Market growth, economies of scale, and plant size in the chemical processing industries. J. Indust. Econom. 36:175–191.CrossrefGoogle Scholar
  • Lieberman MB (1987c) Post-entry investment and market structure in the chemical processing industries. RAND J. Econom. 18(4):533–549.CrossrefGoogle Scholar
  • Lieberman MB, Lee GK, Folta TB (2017) Entry, exit, and the potential for resource redeployment. Strategic Management J. 38(3):526–544.CrossrefGoogle Scholar
  • Maskin ES (1999) Uncertainty and entry deterrence. Econom. Theory 14(2):429–437.CrossrefGoogle Scholar
  • Mills DE, Schumann L (1985) Industry structure with fluctuating demand. Amer. Econom. Rev. 75(4):758–767.Google Scholar
  • Nakao T (1980) Demand growth, profitability, and entry. Quart. J. Econom. 94(2):397–411.CrossrefGoogle Scholar
  • O’Brien J, Folta T (2009) Sunk costs, uncertainty and market exit: A real options perspective. Indust. Corporate Change 18(5):807–833.CrossrefGoogle Scholar
  • Sardella A, De Bona P (2021) Safeguarding the United States pharmaceutical supply chain and policy considerations to mitigate shortages of essential medicines. Working paper, Olin Business School, Washington University in St. Louis.Google Scholar
  • Schmalensee R (1978) Entry deterrence in the ready to eat breakfast cereal industry. Bell J. Econom. 9(2):305–327.CrossrefGoogle Scholar
  • Schmalensee R (1992) Sunk costs and market structure: A review article. J. Indust. Econom. 40(2):125–134.CrossrefGoogle Scholar
  • Seamans RC (2012) Fighting city hall: Entry deterrence and technology upgrades in cable TV markets. Management Sci. 58(3):461–475.LinkGoogle Scholar
  • Sheshinski E, Dreze J (1976) Demand fluctuations, capacity utilization, and costs. Amer. Econom. Rev. 66(5):731–742.Google Scholar
  • Spitz PH (1988) Petrochemicals: The Rise of an Industry (Wiley, New York).Google Scholar
  • SRI International (1976) Process Economics Program Yearbook (SRI International, Menlo Park, CA).Google Scholar
  • SRI International (1989) Directory of Chemical Producers, Western Europe (SRI International, Menlo Park, CA).Google Scholar
  • SRI International (1960, 1967, 1977, 1987) Directory of Chemical Producers, United States (SRI International, Menlo Park, CA).Google Scholar
  • Stobaugh R (1988) Innovation and Competition: The Global Management of Petrochemical Products (Harvard Business School Press, Boston).Google Scholar
  • Sutton J (1991) Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration (MIT Press, Cambridge, MA).Google Scholar
  • Sutton J (1998) Technology and Market Structure (MIT Press, Cambridge, MA).Google Scholar
  • Syverson C (2004) Market structure and productivity: A concrete example. J. Political Econom. 112(6):1181–1222.CrossrefGoogle Scholar
  • Syverson C (2007) Prices, spatial competition and heterogeneous producers: An empirical test. J. Indust. Econom. 55(2):197–222.CrossrefGoogle Scholar
  • Thompson P (2005) Selection and firm survival: Evidence from the shipbuilding industry, 1825–1914. Rev. Econom. Statist. 87(1):26–36.CrossrefGoogle Scholar
  • Uzunca B (2018) A competence-based view of industry evolution: The impact of submarket convergence on incumbent−entrant dynamics. Acad. Management J. 61(2):738–768.CrossrefGoogle Scholar
  • Uzunca B, Cassiman B (2022) Entry diversion: Deterrence by diverting submarket entry. Strategic Management J. Forthcoming, https://doi.org/10.1002/smj.3128.Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.