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The Dixit (1980) hypothesis that incumbents use investment in capacity to deter potential entrants has found little empirical support. Bagwell and Ramey (1996) propose a model where, in the unique game-theoretic prediction based on forward induction or iterated elimination of weakly-dominated...
Persistent link: https://www.econbiz.de/10014029630
monopoly, analysing questions of introductory pricing and quantity rationing. The model suggests that neither of these two … instruments is able to explain why we see so much free software in the markets. -- software monopoly ; lagged network externality …
Persistent link: https://www.econbiz.de/10009725487
monopoly entrusts pricing decisions to a manager who enjoys monetary rewards but dislikes production effort. We show that cheap …
Persistent link: https://www.econbiz.de/10012721849
We offer a new explanation of equilibrium rationing. As is well known, a monopolist selling a durable good and not able to commit to a price sequence has an incentive to lower the price once the consumers with the greatest willingness to pay have bought, but this induces consumers to postpone...
Persistent link: https://www.econbiz.de/10014208652
contestable natural monopoly earns zero profits despite economies of scale. We show that informational imperfections can also …
Persistent link: https://www.econbiz.de/10014047149
monopoly, analysing questions of introductory pricing and quantity rationing. The model suggests that neither of these two …
Persistent link: https://www.econbiz.de/10010292742
capacities can be larger or smaller with a duopoly than with a monopoly. If the two firms co-ordinate on a pareto dominant …
Persistent link: https://www.econbiz.de/10014075437
Persistent link: https://www.econbiz.de/10010386354
Demand volatility and production lead time oblige manufacturers of made-to-stock goods to use economic forecasts in deciding on production quantities. Manufacturers of finitely durable goods face an additional complication -- in making production decisions, they must consider not only the...
Persistent link: https://www.econbiz.de/10010250689
While the previous literature on exclusive dealing has been concerned with the question of how exclusive dealing can raise static profits, this paper analyzes the question of how exclusive dealing can be used to predate in a dynamic context. It is shown that exclusive dealing may arise even if...
Persistent link: https://www.econbiz.de/10003951748