How entry threats induce slack
Article Abstract:
Firms generally accept a slack in their profit performance to forestall the entry of new companies in their market. This entry deterrent practice is found to be successful even if anticipated by new entrants. Thus, markets are not easily contestable, even in the absence of sunk costs, because of asymmetric information and strategic behavior. For favorable market conditions, an incumbent will allow entry and share the market rather than lose profits. If entry has taken place, however, exit will be effected only if market conditions worsen significantly.
Publication Name: International Journal of Industrial Organization
Subject: Business, international
ISSN: 0167-7187
Year: 1992
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Multi-product incumbent and a puppy dog entrant: some simulations for the Norwegian cement market
Article Abstract:
The effects of a puppy dog entrant on product prices are analyzed in a simulation study of a potential entrant into the Norwegian cement market. Prices of an incumbent rise as a response to the puppy dog entrant with high costs which pentrates a low quality segment of the market. The study also indicates that if entry is allowed, the domestic welfare might be improved if government supports the resale of the entrant's product.
Publication Name: International Journal of Industrial Organization
Subject: Business, international
ISSN: 0167-7187
Year: 1992
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Upstream market power and product line differentiation in retailing
Article Abstract:
A study on the pricing strategies and quality of products supplied by retailers when there is competition among them is discussed.
Publication Name: International Journal of Industrial Organization
Subject: Business, international
ISSN: 0167-7187
Year: 2006
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