A Sequential Entry Model with Strategic Use of Excess Capacity
A model of sequential entry with Leontief costs is studied in which demand is iso-elastic. Some or all firms may hold excess capacity in the perfect equilibrium to the entry game. Firms with a first mover advantage trade off the positioning value of a large investment in capacity, leading to a large market share, against the possible costs of bearing the burden of entry deterrence through holding excess capacity in equilibrium.
Year of publication: |
1991-10
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Authors: | Barham, Brad ; Ware, Roger |
Institutions: | Economics Department, Queen's University |
Saved in:
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