Abstract
This article models the product release behavior of multi-product oligopolistic firms in the music recording industry. The model predicts that increasing industry concentration may result in an apportionment of the market among the existing firms, and fewer new product releases. Even though the minimum efficient scale of production in the industry is modest, the apportionment outcome is stabilized by the existence of industry entry barriers that raise the costs of potential competitors or entrants.
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I am indebted to William G. Shepherd for his unstinting counsel and thoughtful comments. I also thank Herbert Gintis, Andrew Brimmer, Robert Gitter, Michael Podgursky, Dean Baker, and Linda Ewing for helpful comments on early drafts. Robert H. Nellson provided outstanding research assistance.
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Alexander, P.J. Entry barriers, release behavior, and multi-product firms in the music recording industry. Rev Ind Organ 9, 85–98 (1994). https://doi.org/10.1007/BF01024221
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DOI: https://doi.org/10.1007/BF01024221