Entry deterrence and experimentation under demand uncertainty
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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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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ژورنال
عنوان ژورنال: International Journal of Industrial Organization
سال: 2011
ISSN: 0167-7187
DOI: 10.1016/j.ijindorg.2010.09.001