Strategic commitments, such as promises and threats, pose several problems to the standard model of economic rationality: first, they can only arise when there is an incentive to free-ride; second, they need to be credible in order to manipulate the others' behaviour; third, once the commitment...

This paper shows how market entry into an unprofitable market can be profitable for a firm. A firm's expansion into a new market can have a beneficial feedback effect for that firm in its old market. By entering into a new market, the firm increases its produced quantity and has higher...

This paper shows how market entry into an unprofitable market can be profitable for a firm. A firm's expansion into a new market can have a beneficial feedback effect for that firm in its “old market”. By entering into a new market, the firm increases its produced quantity and has higher...