Market Structure, R&D and Advertising in the Pharmaceutical Industry

Recent developments in the literature on market structure have allowed the generation of a few key testable predictions from the theory of strategic behaviour. The seminal model considers one simple but general relationship, that between market structure and market size, focusing on the competitive roles of the endogenous sunk costs of advertising and/or research and development (R&D). Evidence presented in this case study, building on earlier econometric work, shows that such endogenous sunk costs do play a crucial role in the formation of market structure in the global pharmaceutical industry. ZUSAMMENFASSUNG - (Werbung, FuE und Marktstruktur in der pharmazeutischen Industrie) Jungere Entwicklungen der Literatur zum Thema "Marktstruktur" ermoglichen es, robuste testbare Hypothesen aus der Theorie des strategischen Verhaltens abzuleiten. Das grundlegende industrieokonomische Modell geht von einer einfachen, aber allgemein gultigen Beziehung zwischen Konzentration und Marktgrose aus. Dabei wird insbesondere der Einflus endogener versunkener Kosten fur Werbung und/oder Forschung und Entwicklung (FuE) auf den Wettbewerb untersucht. Die empirischen Ergebnisse dieser Fallstudie zeigen, das endogene versunkene Kosten tatsachlich eine entscheidende Rolle fur die Herausbildung der Marktstruktur in der pharmazeutischen Industrie spielen. Die Ergebnisse zeigen jedoch auch, das unternehmensspezifische Fahigkeiten geeignet sind, die Reaktionsweisen der Unternehmen im Wettbewerb zu erklaren.

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