Endogenous market structure and the cooperative firm

When the threat of entry by followers includes cooperative firms, the maximum fixed cost that a profit maximizing leader can endure is endogenous. The aggressive strategy required for entry-deterrence curtails the leader’s expected profit and can discourage its initial entry. In such circumstances a cooperative firm may yet be viable, despite having a cost handicap and no first-mover advantage.

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Year of publication:	2014
Authors:	Hueth, Brent ; Moschini, GianCarlo
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 124.2014, 2, p. 283-285
Publisher:	Elsevier
Subject:	Cooperatives \| Endogenous entry \| Entry deterrence \| Nonconvexity

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Type of publication:	Article
Classification:	L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration ; P13 - Cooperative Enterprises
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010933295