Advanced Search
MyIDEAS: Login to save this article or follow this journal

Entry, Sunk Costs and Renegotiation in Duopoly

Contents:

Author Info

  • James BERGIN
  • W. Bentley MacLEOD

Abstract

In this paper we examine the relationship between sunk costs, market structure and welfare in a dynamic duopoly model. We consider a model in which two firms make sequential capacity choices and then play a continuous time game in outputs. It is assumed that the equilibria in the quantity choice stage of the game are renegotiation-proof, and study two polar extremes in this set. It is assumed that either firm one or firm two receives all the ex post rents. In both cases we find, in contrast to most previous studies, that low sunk costs are associated with low welfare.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.jstor.org/stable/20075756
Download Restriction: no

Bibliographic Info

Article provided by ENSAE in its journal Annals of Economics and Statistics.

Volume (Year): (1989)
Issue (Month): 15-16 ()
Pages: 173-191

as in new window
Handle: RePEc:adr:anecst:y:1989:i:15-16:p:08

Contact details of provider:
Postal: 3, avenue Pierre Larousse, 92245 Malakoff Cedex
Phone: 01.41.17.51.55
Email:
Web page: http://annales.ensae.fr/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:adr:anecst:y:1989:i:15-16:p:08. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Robert Gary-Bobo).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.