Barriers to Entry

Formalized by economist Joe S. Bain in his 1956 book Barriers to New Competition. Bain defined it as "an advantage of established sellers over potential entrants, reflected in the extent to which established sellers can raise prices above competitive levels without attracting new firms." His 1954 study of twenty US manufacturing industries led to the 1956 theoretical framework showing how firms create strategic barriers. The American Economic Association called him "the undisputed father of modern industrial organization economics."