Advertising and Entry Deterrence: An Exploratory Model
نویسندگان
چکیده
منابع مشابه
Uncertainty and entry deterrence*
We study a model where capacity installation by an incumbent firm serves to deter others from entering the industry. We argue that uncertainty about demand or costs forces the incumbent to choose a higher capacity level than it would under certainty. This higher level diminishes the attractiveness of deter rence (Proposition 1) and, therefore, the range of parameter values for which deterrence ...
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In this paper, we analyze the interaction between an incumbent rm's nancial contract with a bank and its product market decisions in the face of the threat of entry, in a dynamic model. The main results of the paper are: there exists a separating equilibrium with no limit pricing; the low-cost incumbent repays more to the bank in the rst period, due to the threat of entry; and there are paramet...
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We develop a model of logit demand that extends the traditional duopoly framework of network competition to a multi-firm industry. First, we show that incumbents establish the reciprocal access charge inefficiently below cost when they compete in prices but they behave efficiently if they compete in utilities. Secondly, we study how incumbents determine the industry-wide access charge under the...
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As a manager, you prefer that other firms not enter your markets. Sometimes you’re lucky and you’re protected by natural barriers to entry. Examples of these are legal protections on intellectual property (e.g., a patented product), government regulations limiting entry (e.g., restrictive zoning), and the amount of industry-specific capital investments needed to compete effectively. Many times,...
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We examine a mechanism by which bundling may inefficiently deter entry into the market. The model considers an incumbent monopolist in two complementary components that faces a series of entry attempts by rivals. It is shown that the incumbent can practice bundling to buttress its monopoly position by keeping specialist innovators out of the market. Bundling prevents specialist rivals from coor...
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ژورنال
عنوان ژورنال: Journal of Political Economy
سال: 1983
ISSN: 0022-3808,1537-534X
DOI: 10.1086/261169