A Note on the Excess Entry Theorem in Spatial Models with Elastic Demand
A Note on the Excess Entry Theorem in Spatial Models with Elastic Demand
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DOI：
10.2139/ssrn.1088346
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发表时间：
2007-12
期刊：
影响因子：
--
通讯作者：
Yiquan Gu;Tobias Wenzel
中科院分区：
文献类型：
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作者：
Yiquan Gu;Tobias Wenzel
本文在放松非弹性需求假设的情况下，重新讨论了Vickrey（1964）和Salop（1979）空间模型中的超额进入定理。在需求弹性为常数的需求函数中，我们证明了进入市场的企业数量随着需求弹性的增加而减少，并且发现只有当需求充分缺乏弹性时，超额进入定理才成立。否则，条目不足。在单位弹性需求的极限情况下，市场是垄断的。我们指出何时以及如何公共政策可以是可取的，并扩大我们的结果与更一般的运输成本函数。
This paper revisits the excess entry theorem in spatial models a la Vickrey (1964) and Salop (1979) while relaxing the assumption of inelastic demand. Using a demand function with a constant demand elasticity, we show that the number of firms that enter a market decreases with the degree of demand elasticity.We find that the excess entry theorem does only hold when demand is sufficiently inelastic. Otherwise, there is insufficient entry. In the limiting case of unit elastic demand, the market is monopolized. We point out when and how a public policy can be desirable and broaden our results with a more general transportation cost function.