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The first generic entrant into Canadian pharmaceutical markets has a surprisingly durable impact on market share: consistent with past research, we show that first entrants have a boost of roughly 25% in their expected market share some six years after entry. There appears to be considerable inertia in pharmacies’ choice of which generic drug to stock. In this article, we empirically explore possible explanations for this puzzling phenomenon, including reputation, pharmacy “gratitude,” patient resistance to switching, and transactions costs. [ABSTRACT FROM PUBLISHER]

What is the effect of national antitrust policies in a world with inter- national trade? Traditionally, economic analysis of mergers has assumed a closed economy, which—as we show in this paper—may lead to errant policy in an open economy. We use a very simple model to highlight some key issues in optimal competition policy when trade is important, and compare the nationally optimal number of firms with the globally optimal number of firms in a free trade environment. We show that countries will choose a competition policy that is 'too strict' in the sense that they will prefer to have more firms than is globally optimal, implying that convergence in competition policy should generally lead to a reduction in the number of firms. We also examine the strategic interaction between domestic and foreign competition policy when there is free trade and show that small and large countries will react very differently to changes in the other's policies. [ABSTRACT FROM AUTHOR]

This paper examines firm strategy when competitors are at different points along the learning curve. It shows that firms high on the learning curve will have strong incentives to exclude new competitors, while firms that are learning more slowly will have weaker incentives to hinder new competitors and may even wish to encourage entry. The same strategies are shown to apply when firm reputation is acquired through participation in an industry. Several examples of strategic behaviour that take advantage of differential learning speeds or heterogeneous reputations are suggested and a variety of applications of the principle involved are explored. [ABSTRACT FROM AUTHOR]