Contestable Markets and the Theory of Industry Structure: A Review Article

Brock, William A.

doi:10.1086/261200

Cited by 68 publications

(28 citation statements)

References 8 publications

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“…If, however, the output was to serve new customers or new customer requirement, a different utility should be set up to eliminate x-inefficiency. This conclusion supports the contention that focusing on scale economies alone can be misleading, because they are hardly a sufficient condition for the existence of natural monopoly (Brock, 1983). One such condition is the existence of sunk costs.…”

Section: Alternative Viewssupporting

confidence: 79%

The feasibility of competitive electricity transmission in South Africa

Ahwireng-Obeng¹,

Thobela²

2014

SAJEMS

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The paper investigates whether competitive transmission of electricity is realisable in South Africa by adapting the Delphi research process to survey the opinions of expert panellists drawn from the relevant disciplines. The research propositions revolve around the roles that customers, generators and technology suppliers, among others, could play in providing competitive transmission services. Given that competition in electricity generation is generally accepted, the paper examines the extent to which sunk costs, fixed costs and scale economies are sufficient to block entry into the transmission services sector. The experts were unambiguously convinced that economies of scale in transmission were significant enough to block entry into the industry. Consequently, neither the successful introduction of competition in generation nor Eskom's successful experiment in power transmission and telecommunications joint ventures provides sufficient grounds to believe that it is feasible to implement a competitive electricity transmission industry in South Africa. JEL D40, Q48

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Section: Alternative Viewssupporting

confidence: 79%

The feasibility of competitive electricity transmission in South Africa

Ahwireng-Obeng¹,

Thobela²

2014

SAJEMS

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“…We might however assume that actual incidents of poaching influence the perception of training firms about the poaching threat. In this context, the market for apprenticeship completers can be regarded as a contestable market (for a survey of the relevant literature, see Brock, 1983). That is, employers can enter this market at no cost, whereas training establishments have incurred sunk costs for their training investment.…”

Section: Implications For the Economics Of Apprentice Trainingmentioning

confidence: 99%

Apprentice Poaching in Regional Labor Markets

Stockinger

Zwick

2017

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Apprentice Poaching in Regional Labor Markets*Bastian Stockinger** (IAB Nuremberg)Thomas Zwick (University of Würzburg, ZEW Mannheim, ROA Maastricht)February 2017 AbstractA number of studies have found that firms provide less training if they are located in regions with strong labor market competition. This finding is usually interpreted as evidence of a higher risk of poaching in these regions. Yet, there is no direct evidence that regional competition is positively correlated with poaching. Building on a recently established approach to ex-post identify poaching of apprenticeship completers, our paper is the first to directly investigate the correlation between regional labor market competition and poaching. Using German administrative data, we find that competition indeed increases training establishments' probability of becoming poaching victims. However, poaching victims do not change their apprenticeship training activity in reaction to past poaching. Instead, our findings indicate that the lower training activity in competitive regions can be attributed to lower retention rates, a less adverse selection, and lower labor and hiring costs of apprenticeship completers hired from rivals.JEL Codes: J24, M51, M53, R23

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“…Both incumbent firms and potential entrants have access to the same production and investment i e (product innovation) technology: c I = c~ = c 1 and o 2 = o 2 = v s . The second-stage game on prices proceeds as perfect contestability theory (although with positive sunk cost) predicts (Knieps andVogelsang 1982 andBrock 1983 If incumbent firms set prices that earn above-normal profits (P'I >P~), identical potential entrants are then able to enter profitably by offering a slightly lower price such that p~ < p~ < p~, which yields n~ > 0. Bertrand contestability implies that ql = 0 and qf > 0 if the entrant offers a price lower than the incumbent (for equal quality).…”

Section: Two-stage Game With Product Innovationmentioning

confidence: 99%

Product innovation and contestability

Witteloostuijn

1990

De Economist

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Contestable Markets and the Theory of Industry Structure: A Review Article

Cited by 68 publications

References 8 publications

The feasibility of competitive electricity transmission in South Africa

The feasibility of competitive electricity transmission in South Africa

Apprentice Poaching in Regional Labor Markets

Product innovation and contestability

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