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
Institutions:	Düsseldorf Institute for Competition Economics (DICE), Wirtschaftswissenschaftliche Fakultät
Subject:	Circular city \| Horizontal product differentiation \| Market entry \| Price-sensitive demand

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Extent:	application/pdf
Series:	DICE Discussion Papers. - ISSN 2190-9938.
Type of publication:	Book / Working Paper
Notes:	Number 165
Classification:	L11 - Production, Pricing, and Market Structure Size; Size Distribution of Firms ; L13 - Oligopoly and Other Imperfect Markets
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010956741