Plant closings and exit behaviour in declining industries

Research output: Contribution to journalArticle

48 Citations (Scopus)

Abstract

The plant closing and exit strategies of firms operating in a declining industry are examined. A dynamic, game-theoretic model is utilized. The perfectness criterion is used to restrict the set of Nash equilibria. There are two key equilibrium results. First, when firms have the same number of plants, high cost plants close before lower cost plants. Second, a larger firm (i.e. a firm operating more plants) begins closing plants before a smaller firm, as long as cost differences are not large. -Author

Original languageEnglish (US)
Pages (from-to)493-503
Number of pages11
JournalEconomica
Volume55
Issue number220
StatePublished - 1988

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Industry
Costs
Plant closings
Exit
Nash equilibrium
Large firms
Game-theoretic models
Dynamic games
Small firms

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Plant closings and exit behaviour in declining industries. / Reynolds, Stanley S.

In: Economica, Vol. 55, No. 220, 1988, p. 493-503.

Research output: Contribution to journalArticle

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