Competition in large markets
By: Jeffrey R. Campbell
Contributors: Federal Reserve Bank of Chicago. Research Department
Series: Working paper series -- WP-2005-16; Working paper series (Federal Reserve Bank of Chicago. Research Department : Online) -- WP-2005-16.
Publisher: Federal Reserve Bank of Chicago
Published: 2005
Place of publication: Chicago, Ill.]
Language: eng
Format: [electronic resource] /
Subjects: Competition; Restaurants; Costs; Industries; Size; Supply and demand
Description: "This paper evaluates the simplifying assumption that producers compete in a large  market without substantial strategic interactions using nonparametric regressions of  producers' choices on market size. With such atomistic competition, increasing the  number of consumers leaves the distributions of producers' prices and other choices  unchanged. In many models featuring non-trivial strategic considerations, producers'  prices fall as their numbers increase. I examine observations of restaurants' sales, seating  capacities, exit decisions, and prices from 222 U.S. cities. Given factor prices and  demographic variables, increasing a city's size increases restaurants' average sales and  decreases their exit rate and prices. These results suggest that strategic considerations  lie at the heart of restaurant pricing and turnover."--Federal Reserve Bank of Chicago web site.
Notes: Title from PDF file as viewed on 10/5/2006.

Includes bibliographical references.

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