Entry and Competition in Differentiated Products Markets
提出一种在差异化产品市场中估计进入对竞争影响的方法，通过加入收入方程调整进入门槛比率，发现传统方法可能低估竞争效应，并应用于七个本地服务行业。
We propose a methodology for estimating the competition effects from entry when firms sell differentiated products. We first derive precise conditions under which Bresnahan and Reiss’s entry threshold ratios (ETRs) can be used to measure competition effects. We then augment the traditional entry model with a revenue equation. This serves to adjust the ETRs by the extent of market expansion from entry, giving unbiased estimates of the competition effects. We apply our approach to seven local service sectors. We find that entry typically leads to significant market expansion, implying that traditional ETRs may substantially underestimate the competition effects from entry. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology