TEL  Vol.1 No.3 , November 2011
Endogenous Sunk Cost, Quality Competition and Welfare
ABSTRACT
Competition in quality with escalating levels of endogenous sunk costs may produce levels of concentration even higher than expected in their absence. We show that consumers may very well benefit from such expenditures despite the effects on concentration and likely attenuation of price competition.

Cite this paper
nullG. Ford and M. Stern, "Endogenous Sunk Cost, Quality Competition and Welfare," Theoretical Economics Letters, Vol. 1 No. 3, 2011, pp. 88-90. doi: 10.4236/tel.2011.13018.
References
[1]   J. Sutton, “Sunk Cost and Market Structure,” MIT Press, Cambridge, 1991.

 
 
Top