Market Structure: Theory and Evidence

This chapter reviews the literature which has developed around the `bounds approach' to market structure over the past fifteen years. The focus of this literature lies in explaining cross-industry differences in concentration, and in the size distribution of firms. One of the main ideas involved is that a study of these cross-industry differences offers a powerful way of uncovering the operation of some key competitive mechanisms.

[1]  Kornelius Kraft,et al.  Barriers to Entry and Profitability , 2008 .

[2]  A. Shaked,et al.  Multiproduct Firms and Market Structure , 1990 .

[3]  T. Valletti,et al.  Firm Size Distribution: Testing the 'Independent Submarkets Model' in the Italian Motor Insurance Industry , 1999 .

[4]  A. Dixit,et al.  Monopolistic competition and optimum product diversity , 1977 .

[5]  D. North Competing Technologies , Increasing Returns , and Lock-In by Historical Events , 1994 .

[6]  Harald Gruber Persistence of Leadership in Product Innovation , 1992 .

[7]  Steven Klepper,et al.  Industry shakeouts and technological change , 2005 .

[8]  P. David Clio and the Economics of QWERTY , 1985 .

[9]  Mark J. Roberts,et al.  Patterns of Firm Entry and Exit in U.S. Manufacturing Industries , 1988 .

[10]  J. Bain Barriers to new competition , 1957 .

[11]  Mark D. Manuszak Endogenous market structure and competition in the 19th century American brewing industry , 2002 .

[12]  Steven T. Berry Estimation of a Model of Entry in the Airline Industry , 1992 .

[13]  Dynamic non-price strategy and competition: Models of R&D, advertising and location. , 1997 .

[14]  Game Theoretical Models of Market Structure , 1996 .

[15]  Timothy F. Bresnahan,et al.  Do Entry Conditions Vary across Markets , 1987 .

[16]  C. F. Phillips Industrial Market Structure and Economic Performance , 1971 .

[17]  M. Kendall,et al.  The Advanced Theory of Statistics, Vol. 1: Distribution Theory , 1959 .

[18]  L. Amaral,et al.  Scaling behaviour in the growth of companies , 1996, Nature.

[19]  John C. Harsanyi,et al.  Общая теория выбора равновесия в играх / A General Theory of Equilibrium Selection in Games , 1989 .

[20]  D. Fudenberg,et al.  Preemption and Rent Equalization in the Adoption of New Technology , 1985 .

[21]  J. Sutton Technology and Market Structure , 1998 .

[22]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .

[23]  O. Marsili,et al.  The Anatomy and Evolution of Industries , 2001 .

[24]  R. Schmalensee Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry , 1978 .

[25]  Stanley E. Boyle,et al.  Economic Concentration: Structure, Behavior, and Public Policy , 1975 .

[26]  M. Asplund What Fraction of a Capital Investment is Sunk Costs , 2003 .

[27]  T. Bresnahan,et al.  Entry in Monopoly Market , 1990 .

[28]  L. Weiss Concentration and price , 1989 .

[29]  Jeongwen Chiang,et al.  Are Sutton's Predictions Robust?: Empirical Insights into Advertising, R&D, and Concentration , 1996 .

[30]  Extreme value theory for dependent sequences via the stein-chen method of poisson approximation , 1988 .

[31]  M. Porter,et al.  Market Structure, Oligopoly, and Stability of Market Shares , 1978 .

[32]  Industrial Concentration and Market Integration in the European Union , 2001 .

[33]  G. Bakker The Decline and Fall of the European Film Industry: Sunk Costs, Market Size, and Market Structure, 1890-1927 , 2005 .

[34]  Chang‐Yang Lee A New Perspective on Industry R&D and Market Structure , 2005 .

[35]  Timothy F. Bresnahan,et al.  Technological Competition and the Structure of the Computer Industry , 2003 .

[36]  Robert W. Rosenthal,et al.  A Model in Which an Increase in the Number of Sellers Leads to a Higher Price , 1980 .

[37]  S. Winter,et al.  An Evolutionary Theory of Economic Change.by Richard R. Nelson; Sidney G. Winter , 1987 .

[38]  R. Selten A Model of Oligopolistic Size Structure and Profitability , 1983 .

[39]  Roger Ware,et al.  A Theory of Market Structure with Sequential Entry , 1987 .

[40]  Concentration and public policies in the broadcasting industry: the future of television , 1997 .

[41]  Volker Nocke Collusion and dynamic (under‐) investment in quality , 2007 .

[42]  Bronwyn H Hall,et al.  The Relationship between Firm Size and Firm Growth in the U.S. Manufacturing Sector , 1986 .

[43]  Lennart Hjalmarsson The size distribution of establishments and firms derived from an optimal process of capacity expansion , 1974 .

[44]  R. Caves INFORMATION STRUCTURES OF PRODUCT MARKETS , 1986 .

[45]  Paul B. Ellickson Does Sutton apply to supermarkets , 2007 .

[46]  H. Stanley,et al.  The growth of business firms: theoretical framework and empirical evidence. , 2005, Proceedings of the National Academy of Sciences of the United States of America.

[47]  Boyan Jovanovic Selection and the evolution of industry , 1981 .

[48]  John Sutton,et al.  The Variance of Firm Growth Rates: The Scaling Puzzle , 2001 .

[49]  P. Dasgupta,et al.  Industrial Structure and the Nature of Innovative Activity , 1980 .

[50]  Pedro L. Marin,et al.  Innovation and Market Structure: An Empirical Evaluation of the 'Bounds Approach' in the Chemical Industry , 2002 .

[51]  O. Williamson Innovation and Market Structure , 1965, Journal of Political Economy.

[52]  S. Klepper Entry, Exit, Growth, and Innovation over the Product Life Cycle , 1996 .

[53]  Patrick Paul Walsh,et al.  Portfolio Effects and Firm Size Distribution: Carbonated Soft Drinks* , 2002 .

[54]  C. D. Rodger A macromolecular build-up , 1986, Nature.

[55]  Franklin M. Fisher,et al.  Games Economists Play: A Noncooperative View , 1989 .

[56]  John T. Scott Firm versus Industry Variability in R&D Intensity , 1984 .

[57]  John Sutton,et al.  Rich Trades, Scarce Capabilities: Industrial Development Revisited , 2001 .

[58]  J. Vickers,et al.  Perfect Equilibrium in a Model of a Race , 1985 .

[59]  R. D. Juan The independent submarkets model: an application to the Spanish retail banking market , 2003 .

[60]  Ariel Rubinstein,et al.  Review of Theory of Industrial Organization by J.Tirole , 1989 .

[61]  G. Symeonidis,et al.  The Effects of Competition: Cartel Policy and the Evolution of Strategy and Structure in British Industry , 2002 .

[62]  Structural change in U.S. food manufacturing, 1958–1997 , 2001 .

[63]  John Sutton,et al.  Product differentiation and industrial structure , 1985 .

[64]  H. A. Simon,et al.  Skew Distributions and the Size of Business Firms , 1977 .

[65]  R. Starr,et al.  A Note on Indivisibilities, Specialization, and Economies of Scale , 1987 .

[66]  Luís M. B. Cabral,et al.  The Learning Curve, Market Dominance and Predatory Pricing , 1994 .

[67]  Jeffrey R. Campbell,et al.  Market Size Matters , 2000 .

[68]  Michael J. Mazzeo Product Choice and Oligopoly Market Structure , 2002 .

[69]  Catherine Matraves,et al.  Market Structure, R&D and Advertising in the Pharmaceutical Industry , 2003 .

[70]  Paul Geroski,et al.  Market dynamics and entry , 1991 .

[71]  Harald Gruber,et al.  Learning and Strategic Product Innovation: Theory and Evidence for the Semiconductor Industry , 1994 .

[72]  Almarin Phillips,et al.  Technology and Market Structure: A Study of the Aircraft Industry , 1971 .

[73]  J. Vickers,et al.  Racing with Uncertainty , 1987 .

[74]  Johannes van Biesebroeck,et al.  Firm Size Matters: Growth and Productivity Growth in African Manufacturing , 2005, Economic Development and Cultural Change.

[75]  T. Bresnahan Sutton's Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration , 1992 .

[76]  Jacques-François Thisse,et al.  Entry (and exit) in a differentiated industry , 1980 .

[77]  Rebeca de Juan,et al.  Entry in independent submarkets: an application to the Spanish retail banking market , 2002 .

[78]  山东大学经济学院,et al.  产业经济评论 = Journal of Industrial Economics , 2002 .

[79]  M. Spence The Learning Curve and Competition , 1981 .

[80]  John Sutton,et al.  Marshall's Tendencies: What Can Economists Know? , 2000 .

[81]  J. Sutton Gibrat's Legacy , 1996 .

[82]  M. Giorgetti Quantile Regression in Lower Bound Estimation , 2001 .

[83]  Steven J. Davis,et al.  Gross Job Creation, Gross Job Destruction and Employment Reallocation , 1991 .

[84]  J. Tirole The Theory of Industrial Organization , 1988 .

[85]  Volker Nocke,et al.  Firm Turnover in Imperfectly Competitive Markets , 2003 .

[86]  M. Lokshin,et al.  Identifying Welfare Effects from Subjective Questions , 1999 .

[87]  J. Sutton Sunk Costs and Market Structure , 1991 .

[88]  R. Gibrat,et al.  Les inégalités économiques : applications, aux inégalitês des richesses, a la concentration des entreprises, aux populations des villes, aux statistiques des familles, etc. : d'une loi nouvelle la loi de l'effet proportionnel , 1931 .

[89]  Competitive Profits in the Long Run , 1992 .

[90]  H. Rao,et al.  The Demography of Corporations and Industries , 1999 .

[91]  Paul B. Ellickson Quality competition in retailing: A structural analysis , 2006 .

[92]  P. M. Shearer,et al.  Zipf Distribution of U . S . Firm Sizes , 2022 .

[93]  Hugo Hopenhayn Entry, exit, and firm dynamics in long run equilibrium , 1992 .

[94]  N. Mann,et al.  A men goodness-of-fit test for the two-parameter wetbull or extreme-value distribution with unknown parameters , 1973 .

[95]  W. Baumol,et al.  Contestable Markets and the Theory of Industry Structure , 1982 .

[96]  Richard L. Smith Maximum likelihood estimation in a class of nonregular cases , 1985 .

[97]  Michael Raith,et al.  Competition, Risk and Managerial Incentives , 2001 .

[98]  A. Pakes,et al.  Markov-Perfect Industry Dynamics: A Framework for Empirical Work , 1995 .

[99]  M. Giorgetti Lower Bound Estimation - Quantile Regression and Simplex Method: An Application to Italian Manufacturing Sectors , 2003 .

[100]  George Symeonidis Price Competition and Market Structure: The Impact of Cartel Policy on Concentration in the UK , 2003 .

[101]  David S. Evans Tests of Alternative Theories of Firm Growth , 1987, Journal of Political Economy.

[102]  John Sutton,et al.  Market Share Dynamics and the Persistence of Leadership Debate , 2004 .

[103]  Boyan Jovanovic,et al.  The Life Cycle of a Competitive Industry , 1993, Journal of Political Economy.

[104]  Luís M. B. Cabral,et al.  On the Evolution of the Firm Size Distribution: Facts and Theory , 2001 .

[105]  J. Bouchaud,et al.  Statistical Models for Company Growth , 2002, cond-mat/0210479.

[106]  S. J. Prais,et al.  The Analysis of Business Concentration: A Statistical Approach , 1956 .

[107]  M. Shubik,et al.  Market structure and behavior , 1982 .

[108]  S. Davies,et al.  Industrial Organization in the European Union: Structure, Strategy, and the Competitive Mechanism , 1996 .

[109]  Ron Goldman,et al.  Poisson approximation , 2000, Proceedings Geometric Modeling and Processing 2000. Theory and Applications.

[110]  P. Rosenau Market Structure and Performance , 2001, Journal of health & social policy.

[111]  Sam Peltzman,et al.  The Handbook of Industrial Organization , 1991, Journal of Political Economy.

[112]  R. Schmalensee Sunk Costs and Market Structure: A Review Article , 1992 .

[113]  R. Deneckere,et al.  Incentives to Form Coalitions with Bertrand Competition , 1985 .

[114]  Rachel Griffith,et al.  Innovation and Market Structure , 1993 .

[115]  D. Fudenberg,et al.  Learning-by-Doing and Market Performance , 1983 .

[116]  Frederic M. Scherer International high-technology competition , 1992 .

[117]  L. Samuelson,et al.  Patterns of Firm Entry and Exit in U.S. Manufacturing Industries , 2007 .

[118]  Richard Evely,et al.  Concentration in British industry , 1960 .

[119]  Steven Klepper,et al.  The Evolution of New Industries and the Determinants of Market Structure , 1990 .

[120]  Maurice G. Kendall,et al.  The Advanced Theory of Statistics. Volume I, Distribution Theory. , 1959 .

[121]  Lower Bounds of Concentration in a Small Open Economy , 2006 .