PROJECTS: Economics Ideas (2)

I believe it is possible to use the Entry Deterrence/Accommodation model to explain how GM deterred entry of foreign automakers through lobbying (rent seeking investment) by increasing the entry cost, then accommodated them which triggered the downfall of the company. The main reasons were giving up competition because of the relying on trade barriers that were supposed to protect the US auto industry from foreign competitors and then inability to catch up with foreign competitors when they were actually accommodated offering higher quality cars at reasonable prices. This project will require labor-intensive data collection on US and Japanese cars and automakers.