期刊名称：Discussion Papers / School of Business, University of New South Wales
出版年度：2008
卷号：2008
出版社：Sydney
摘要：Should governments subsidize entry to promote competition? In general, theory
models cannot determine whether entry under the free-entry condition is socially ex-
cessive, optimal, or insu¢ cient. In this paper I propose an empirical framework to
evaluate welfare consequences of policy intervention through entry in di¤erentiated
product markets, with a case study of the US Medicare HMO market. In endogenizing
.rms.entry-exit decision, a technical breakthrough is to explicitly incorporate .rm het-
erogeneity by employing a sequential move game. This enables us to exploit detailed
.rm level data and makes policy simulations relevant. I .nd no evidence of socially
excessive entry. The government may achieve higher social welfare by expanding the program.
