Contestable Markets and the Theory of Industry Structure

Baumol, W. J., & Panzar. (1982). Contestable Markets and the Theory of Industry Structure. Harcourt Brace.

Type

Book

Intellectual base

Review or monograph

Year

1982

Link

https://openlibrary.org/isbn/9780155139107verified

Cited from

economics_finance

Cited by

2 citations across 2 artifacts.

Each citation links to the sentence it supports in the citing article.

Primes

• Economies Of Scope
  • It separates two configurations — a world in which each output is produced on a dedicated base, and a world in which a single base spans the whole portfolio — and names the cost advantage of the second over the first whenever the shared base is fixed and re-usable across variety, a contrast Baumol, Panzar, and Willig (1982) formalized through the subadditivity of the multi-output cost function.

    This sourceHarcourt Brace Jovanovich, New York. Formalizes the multi-output cost function and its subadditivity (cost of the joint portfolio below the sum of stand-alone costs), establishing the separation of scale from scope as the core diagnostic of multi-product cost structure

Domain-specific

• Barrier to Entry
  • Where this asymmetry is large and durable, incumbents can sustain prices above long-run average cost (earn rents) without triggering the entry that would compete them away; where the asymmetry is absent, pricing above cost invites entry and markets are contestable even with few current competitors

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• https://books.google.com/books/about/Contestable_Markets_and_the_Theory_of_In.html?id=hHdgAAAAIAAJ ×1

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