Price-sensitive demand and market entry

This paper revisits the optimal entry decision in a differentiated product market where customer demand is price-sensitive and depends on a per-unit transport cost. We show that too few firms may enter for high entry cost and high transport cost compared to the socially optimal outcome.

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Year of publication:	2014
Authors:	Gu, Yiquan ; Rasch, Alexander ; Wenzel, Tobias
Publisher:	Düsseldorf : Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
Subject:	Circular city \| Horizontal product differentiation \| Market entry \| Price-sensitive demand

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Series:	DICE Discussion Paper ; 165
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
ISBN:	978-3-86304-164-9
Other identifiers:	800327349 [GVK] hdl:10419/103374 [Handle] RePEc:zbw:dicedp:165 [RePEc]
Classification:	L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L13 - Oligopoly and Other Imperfect Markets
Source:	EconStor

Persistent link: https://www.econbiz.de/10010421037