Fulfilled Expectations of Entry
I develop a two-period model of entry deterrence with endogenous market demands such that the consumer's expectation about the future market structure is fulfilled in equilibrium. I find that both expectations (duopoly and monopoly) are fulfilled in the incumbent's price-setting game, while there is a unique equilibrium in the quantity-setting game. I also find that "quantity" is more entry-deterring than "price" in the sense that the maximum value of the entry cost that allows entry in the price-setting game is higher than or equal to that of the quantity-setting game.
Year of publication: |
1993
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Authors: | Kim, Jaehong |
Published in: |
RAND Journal of Economics. - The RAND Corporation, ISSN 0741-6261. - Vol. 24.1993, 4, p. 681-695
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Publisher: |
The RAND Corporation |
Saved in:
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