Sunk Costs and Antitrust Barriers to Entry

No 4457-04, Working papers from Massachusetts Institute of Technology (MIT), Sloan School of Management

Abstract: US antitrust policy takes as its objective consumer welfare, not total economic welfare. With that objective, Joe Bain's definition of entry barriers is more useful than George Stigler's or definitions based on economic welfare. It follows that economies of scale that involve sunk costs may create antitrust barriers to entry. A simple model shows that sunk costs without scale economies may discourage entry without creating an antitrust entry barrier.

Keywords: antitrust; U.S. antitrust policy; entry barriers (search for similar items in EconPapers)
Date: 2004-12-10
New Economics Papers: this item is included in nep-com, nep-ent, nep-ind and nep-reg
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Citations: View citations in EconPapers (27)

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Related works:
Journal Article: Sunk Costs and Antitrust Barriers to Entry (2004)
Working Paper: Sunk Costs and Antitrust Barriers to Entry (2004)
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