Working Paper No. 1102

Entry Regulations, Welfare and Determinants of Market Structure

Published: December 28, 2015Pages: 73Keywords: Imperfect competition; product differentiation; retail markets; entry; exit; sunk costs; welfareJEL-codes: L11, L13, L81

Entry Regulations, Welfare and Determinants of Market Structure Florin Maican and Matilda Orth

We use a dynamic oligopoly model of entry and exit with store-type differentiation to evaluate how entry regulations affect profitability, market structure and welfare. Based on unique data for all retail food stores in Sweden, we estimate demand, recover variable profits, and estimate entry costs and fixed costs by store type. Counterfactual policy experiments show that welfare increases when competition is enhanced by lower entry costs. Protecting small stores by imposing licensing fees on large stores is not welfare enhancing. This study sheds light on the long-run implications of entry regulations for the welfare of differentiated product industries with endogenous entry and exit.

Matilda Orth


Ph: +46 8 665 45 31
Mob: +46 73 642 3824

Florin Maican


Ph: +46 31 786 4866
Mob: +46 76 235 3039

Sick of Inequality?

An Introduction to the Relationship between Inequality and Health

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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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