The Dynamic Spillovers of Entry: An Application to the Generic Drug Industry

This paper examines whether experience from entry in one market can potentially enhance profitability at a future market opportunity for a related product. We formulate and estimate a dynamic game of entry in which forward-looking firms make decisions not just based on present benefits of past entry but also anticipating potential future benefits of current entry. Dynamic spillovers of entry are incorporated through a firm-specific unobservable...