SUNK COSTS, PROFIT VARIABILITY, AND TURNOVER |
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| Authors: | ADELINA GSCHWANDTNER VAL E. LAMBSON |
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| Affiliation: | Gschwandtner:;Universität Assistent Magistrate Doctor, Department of Economics, University of Vienna, BWZ Bruennerstr. 72, A-1210 Vienna, AUSTRIA. Phone (00431) 4277 37480, Fax (00431) 4277 37489, E-mail Lambson:;Professor of Economics, Department of Economics, Brigham Young University, Provo UT 84602, USA. Phone (801) 422-7765, Fax (801) 422-0194, E-mail |
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| Abstract: | ![]()
Dynamic competitive models of industry evolution suggest that firm profit will be more volatile, and turnover lower, in industries with higher sunk costs. These implications are consistent with empirical observation. (JEL L00 ) |
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