| This dissertation investigates four issues in entry and accommodation games in the U.S. photographic film industry for 1970-90. In this period, the industry evolved from a virtual monopoly of Eastman Kodak, to a functional duopoly with the entry of Fuji Photo Film of Japan in 1980. Price and advertising were two elements of the competitive strategy of these firms. The four issues addressed in this dissertation are: (i) measuring market structure before and after entry, (ii) measuring social welfare before and after entry, (iii) since the entrant imported its product, measuring how pricing and advertising of the entrant, and market structure, vary with exchange rate movements, (iv) analyzing what functional form assumptions enable the identification of industry structure parameters.;The first issue is addressed by formulating a fully structural model of firm demand and cost. In the post-entry period, various regimes of duopoly games are explicitly modeled and tested. Estimates for demand and cost functions of the incumbent before and after entry, of the entrant, and the firm conduct after entry are obtained.;The second issue is of the social optimality of pricing and advertising by the pre-entry monopolist, and the post-entry duopolists. We recognize that this issue needs to be addressed in a partial framework, where the optimality of one strategy can be examined, given the market outcomes of other firm strategies. Welfare changes due to entry in the industry are also measured.;The third issue, measuring the response of pricing and advertising of the entrant to exchange rate movements, is done in two parts. The first measures the responsiveness, given the market structure for 1980-90. The second demonstrates that the market structure itself is determined by exchange rate movements.;The fourth issue is a theoretical one. In modeling demand, cost and firm conduct, several functional form assumptions are necessary. We develop a distinction between assumptions that are crucial to estimating parameters of interest, and those made for tractability of modeling and estimation. |
