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Competition for Scarce Resources.

Abstract:

We show that the efficient allocation of production capacity can turn a competitive industry and downstream market into an imperfectly competitive one. Even though downstream firms have symmetric production technologies, the downstream industry structure will be symmmetric only if capacity is sufficiently scarce. Otherwise it will be asymmetric, with one large fat capacity-hoarding firm and a fringe of smaller lean and fit firms, so that Tobin`s Q varies inversely with firm size. This is s...

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Authors


Péter Eső More by this author
Volker Nocke More by this author
Lucy White More by this author
Volume:
365
Series:
Discussion paper series
Publication date:
2007
URN:
uuid:7059dae4-8897-42d3-9bd1-a09b3ac94f28
Local pid:
oai:economics.ouls.ox.ac.uk:14787
Language:
English

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