When a study finds that a policy had 'no effect,' it might actually be a sign that the market is so competitive it's become immune to outside help.
SSRN · March 17, 2026 · 6315878
The Takeaway
Researchers usually throw away 'failed' studies where they couldn't find a clear result, assuming they didn't have enough data. This paper shows that in hyper-competitive industries, the market structure itself is so efficient that it mechanically swallows up the impacts of new laws, meaning that a 'null result' is actually proof of how cutthroat the industry really is.
From the abstract
When evaluating policy counterfactuals in structural entry models, researchers frequently encounter statistically insignificant estimates. This paper shows that such insignificance often reflects equilibrium structure rather than estimation failure. Strategic interaction can mechanically attenuate policy responses, compressing economically meaningful effects into magnitudes that are statistically difficult to detect. To formalize this idea, I introduce the insignificance frontier: the largest po