I was originally induced to think about barriers to entry by some re­ search done for Charles River Associates, Inc., Boston, on behalf of their client IBM Corporation, Armonk, N.Y. After the end of this re­ search project I continued to work on entry barriers and related is­ sues of market structure. The results of this effort are reported here. What I present is not a book in the traditional sense of the word. Due to other research and administrative obligations I could not, without substantial delay, present a more finished product. The rapid progress in the field of industrial organisation theory made me fear that my results could become obsolete if I further waited with their publica­ tion. I hope that the early presentation of a progress report rather than a much later publication of a finished product is not only in my interest but also in the interest of economics.

1 The General Theoretical Framework.- 1. The Three Levels of Competition.- 2. Barriers to Entry and Externalities.- 3. Entry Deterring Strategies.- 4. Measuring Entry Barriers.- 5. Multidimensionality of Entry.- 6. Policy Implications of the Concept.- 2 Absolute Cost Advantages and Barriers to Entry.- 1. Superior Efficiency.- 2. Patent Rights as Cost Advantages.- 3. Cost Advantages due to Ownership of Scarce Resources.- 4. Conclusion.- 3 Economies of Scale without Intertemporal Links.- 4 Economies of Scale with Intertemporal Links.- 5 Product Differentiation: Goodwill I: The Basic Model.- 1. The Extrapolation Principle.- a) An Utopia with efficient resource allocation.- b) Monitoring of employees and job market signalling.- c) The Vertical Integration Problem.- d) Goodwill as a source of information about product quality.- e) A note on some recent developments in game theory.- 2. A Model of Goodwill.- a) The Consumer.- b) Market Equilibrium.- c) Long Run Equilibrium and Entry Conditions.- d) Barriers to Entry and Goodwill in the Model.- 3. The Meaning of Rational Expectations and the Extrapolation Principle.- 6 Product Differentiation: Goodwill II: Informational Activities.- 1. Efforts to Provide Quality Information (Signalling).- 2. Bias Against Newcomers.- 3. Product Testing.- 4. Economies of Scale due to Goodwill.- 5. Conclusion.- 7 Capital Requirements and Barriers to Entry.- 1. Risk without Moral Hazard.- 2. Asymmetric Information as a Distortion of Entry in the Presence of Risk.- a) How to Define Efficiency when Subjective Probabilities are Variable.- b) A Model of Risk Spreading with Moral Hazard (Asymmetric Information).- c) Project Size and Distortion.- 3. Implications for Capital Requirements as Entry Barriers.- a) The Distortions Discussed are of the Externality Type.- b) Bias of Financial Intermediaries.- c) Capital Requirements and Risk: The Leasing Example.- d) Correlated Risk.- e) Risk and Strategic Entry Deterrence.- 8 Barriers to Entry in Progressive Industries I: Strictly Sequential Innovations.- 1. The Three Level Framework as a Basis to Study the Relation of Entry Barriers and Technical Progress.- 2. A Simple Model with Strictly Sequential Innovation Structure. The Case of a Strictly Stationary Environment.- 3. The Influence of Market Size and Market Growth.- 4. The Influence of the Degree of Progressiveness and of the Price Elasticity of Demand.- 9 Barriers to Entry in Progressive Industries II: Competing Innovations.- 1. The Equilibrium and the Optimum Number of Competing Innovations for a Given Timing of Innovations.- 2. The Timing of Competing Innovations.- 3. The Equilibrium: Comparative Static Analysis.- 4. The Optimum.- 5. Evaluation.- 6. Some Policy Implications.- a) The Patent Issue.- b) Predatory Pricing.- c) Price Competition between Consecutive Innovations.- 10 Conclusion.- References.