Editing Barriers to entry (section)

==Definitions==

Various conflicting definitions of "barrier to entry" have been put forth since the 1950s. This has caused there to be no clear consensus on which definition should be used.<ref name="entryBarriersInEconomicAndAntitrustAnalysis"/><ref name="west-oecd">{{Cite tech report|last=West|first=Jeremy|date=January 2007|title=Competition and Barriers to Entry|url=https://www.oecd.org/competition/mergers/37921908.pdf|access-date=January 24, 2023|publisher=[[OECD|Organisation for Economic Co-operation and Development]]}}</ref><ref>{{cite journal|url=http://blj.ucdavis.edu/archives/vol-7-no-1/entry-barriers-and-contemporary-antitrust-litigation.html|title=Entry Barriers and Contemporary Antitrust Litigation|url-status=live|archive-url=http://archive.wikiwix.com/cache/20160329034513/http://blj.ucdavis.edu/archives/vol-7-no-1/entry-barriers-and-contemporary-antitrust-litigation.html|archive-date=March 29, 2016|last=Lazaroff|first=Daniel E.|date=December 2006|journal=UC Davis Business Law Journal|volume=7|number=1|access-date=January 24, 2023}}</ref>

McAfee, Mialon, and Williams list seven common definitions in economic literature in chronological order including:<ref name="entryBarriersInEconomicAndAntitrustAnalysis" />

In 1956, [[Joe S. Bain]] used the definition "an advantage of established sellers in an industry over potential entrant sellers, which is reflected in the extent to which established sellers can persistently raise their prices above competitive levels without attracting new firms to enter the industry." McAfee et al. criticized this as being tautological by putting the "consequences of the definition into the definition itself."

In 1968, [[George Stigler]] defined an entry barrier as "A cost of producing that must be borne by a firm which seeks to enter an industry but is not borne by firms already in the industry." McAfee et al. criticized the phrase "is not borne" as being confusing and incomplete by implying that only current costs need be considered.

In 1979, [[Franklin M. Fisher]] gave the definition "anything that prevents entry when entry is socially beneficial." McAfee et al. criticized this along the same lines as Bain's definition.

In 1981, Baumol and Willig gave the definition "An entry barrier is anything that requires an expenditure by a new entrant into an industry, but that imposes no equivalent cost upon an incumbent"

In 1994, Dennis Carlton and Jeffrey Perloff gave the definition, "anything that prevents an entrepreneur from instantaneously creating a new firm in a market." Carlton and Perloff then dismiss their own definition as impractical and instead use their own definition of a "long-term barrier to entry" which is defined very closely to the definition in the introduction.

In 2011, Wheelen and Hunger gave the definition "an obstruction that makes it difficult for a company to enter an industry".<ref>{{cite book |last1=Wheelen |first1=Thomas L. |last2=Hunger |first2=J. David |title=Strategic Management and Business Policy |date=2011 |publisher=Pearson Education |page=111 |url=http://www.mim.ac.mw/books/Wheelen's%20Strategic%20Management.pdf |access-date=21 April 2023}}</ref>

A '''primary barrier to entry''' is a cost that constitutes an economic barrier to entry on its own. An '''ancillary barrier to entry''' is a cost that does not constitute a barrier to entry by itself, but reinforces other barriers to entry if they are present.<ref name="entryBarriersInEconomicAndAntitrustAnalysis" /><ref>{{cite tech report|url=http://www.ozshy.byethost4.com/entry9.pdf?i=1|title=Entry Barriers and Antitrust Objectives|via=ozshy.com|access-date=January 24, 2023|last1=Shy|first1=Oz|last2=Stenbacka|first2=Rune|date=December 2005}}</ref>

An '''antitrust barrier to entry''' is "a cost that delays entry and thereby reduces social welfare relative to immediate but equally costly entry".<ref name="entryBarriersInEconomicAndAntitrustAnalysis" /> This contrasts with the concept of ''economic barrier to entry'' defined above, as it can delay entry into a market but does not result in any cost-advantage to incumbents in the market. All economic barriers to entry are antitrust barriers to entry, but the converse is not true.