Sunk Costs, Depreciation, and Industry Dynamics

Adelina Gschwandtner; Val E Lambson

doi:10.1162/REST_a_00236

Sunk Costs, Depreciation, and Industry Dynamics

Adelina Gschwandtner, Val E Lambson

Statistics and Mathematics

Publikation: Wissenschaftliche Fachzeitschrift › Originalbeitrag in Fachzeitschrift › Begutachtung

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Abstract

Two of the most robust results from dynamic competitive models of industrial organization suggest that higher-sunk-cost industries should exhibit higher intertemporal variability in the market value of their firms and lower intertemporal variability in the size of their industries. These predictions have done well empirically. This paper argues on theoretical and empirical grounds that depreciation generates countervailing effects.

Originalsprache	Englisch
Seiten (von - bis)	1059 - 1065
Fachzeitschrift	Review of Economics and Statistics
Jahrgang	94
Ausgabenummer	4
DOIs	https://doi.org/10.1162/REST_a_00236
Publikationsstatus	Veröffentlicht - 1 Dez. 2012

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