Free Entry and Social Inefficiency in Radio Broadcasting
首次量化广播业中自由进入导致的社会无效率，利用广告价格、电台数量和收听数据估计参数，发现自由进入造成的福利损失占收入的45%。
In theory, free entry can lead to social inefficiency. We study the radio industry in a first attempt to quantify this inefficiency. Using cross-sectional data on advertising prices, the number of stations, and radio listening, we estimate the parameters of listeners' decisions and of firms' profits. Relative to the social optimum, our estimates imply that the welfare loss (to firms and advertisers) of free entry is 45% of revenue. However, the free entry equilibrium would be optimal if the marginal value of programming to listeners were about three times the value of marginal listeners to advertisers.