Showing papers by "Kenneth L. Judd published in 1983"

Credible Spatial Preemption

Abstract: It is often argued that incumbent firms may deter entry by preemptive investment in new goods. We show that these conclusions are reserved when multiproduct incumbent firms may exit in response to entry. Once entrants are in an industry, an incumbent will often want to withdraw some goods to prevent competition with the entrant from reducing profits on other goods. Such a reaction makes entry more attractive to a potential entrant. The equilibrium industry structure is less likely to be monopolistic as the goods are better substitutes, as exit costs are low, and as the competition between producers of the same good is more intense.(This abstract was borrowed from another version of this item.)

Short-Run Analysis of Fiscal Policy in a Simple Perfect Foresight Model

Abstract: This paper examines the short-run impact of current and future changes in fiscal policy on current investment in a simple representative-agent, perfect foresight model. We show that anticipated investment tax credits may depress current investment, as may an immediate income tax cut financed by f uture cuts in government expenditure. These impacts do result when we parameterize the model with current empirical estimates of the relevant parameters.