Abstract

HERNANDEZ TRILLO, Fausto. The disputability of political regime: An approch to contestable markets. Inv. Econ [online]. 1999, vol.59, n.228, pp.207-226. ISSN 0185-1667.

A model of Contestable Markets is applied to a political regime. The model assumes a dictator who has comparative advantage in violence and becomes a natural monopolist in this industry. There exist, however, a set of potential entrants who constantly try to enter the industry. The incumbent faces a lower cost function than entrants. Nevertheless, the incumbent to protect its position has to eventually incur additional costs. On the other hand, the potential entrants collude and hence lower their costs. When both cost functions equate, entry occurs. The model is then applied to the Porfirian era in México. The paper introduces an altemative way of analizing this episode in Mexican History.

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