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Location Choice, Product Proliferation and Entry Deterrence

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Author Info
Bonanno, Giacomo

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Abstract

Within a slightly modified version of Hotelling's model_(1929) the author reconsiders the claim that the threat of entry induces existing firms to produce a larger number of products than otherwise. The author shows that entry deterence, although optimal, need not be achieved through product proliferation.In some cases the incumbent monopolist resorts to an entry-deterring strategy based on location choice rather than product proliferation. The author also shows that in some cases the number of products chosen by the incumbent facing the threat of entry is strictly greater than the minimum number required to deter entry. Copyright 1987 by The Review of Economic Studies Limited.

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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 54 (1987)
Issue (Month): 1 (January)
Pages: 37-45
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Handle: RePEc:bla:restud:v:54:y:1987:i:1:p:37-45

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  3. L. Lambertini, 1998. "Equilibrium Locations in A Spatial Model With Sequential Entry in Real Time," Working Papers 326, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
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  4. Reisinger, Markus, 2004. "Vertical Product Differentiation, Market Entry, and Welfare," Discussion Papers in Economics 479, University of Munich, Department of Economics. [Downloadable!]
  5. L. Lambertini & R. Orsini, 2003. "Network Externality and the Coordination Problem: A Generalization of Rohlfs's Model," Working Papers 471, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  6. L. Lambertini & S. Poddar & D. Sasaki, 1997. "RJVs and Price Collusione under Endogenous Product Differentiation," Working Papers 295, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
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  7. Luca Lambertini, 1995. "Product Innovation Under Vertical Differentiation and the Persistence of Monoply," Working Papers 227, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  8. Marc Bourreau & Pinar Dogan & Matthieu Manant, 2007. "Modularity and Product Innovation in Digital Markets," Review of Network Economics, Concept Economics, vol. 6(2), pages 175-193, June. [Downloadable!]
  9. Katja Seim & V. Brian Viard, 2003. "The Effect Of Entry And Market Structure On Cellular Pricing Tactics," Working Papers 03-13, NET Institute, revised Nov 2003. [Downloadable!]
  10. Roberto Fontana & Lionel Nesta, 2007. "Product Innovation and Survival in a High-Tech Industry," CESPRI Working Papers 208, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Dec 2007. [Downloadable!]
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  11. L. Lambertini, 2001. "Production and Advertising in a Dynamic Hotelling Monopoly," Working Papers 395, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  12. Richard Gilbert & Carmen Matutes, 1990. "Multiproduct Competition," Annales d'Economie et de Statistique, ADRES, issue 18, pages 08, Avril-Jui. [Downloadable!]
  13. Luca Lambertini, 1995. "The Multiproduct Monopolist Under Vertical Differentiations: an Inductive Approach," Working Papers 226, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  14. L. Lambertini, 2008. "Optimal Product Proliferation in Monopoly: A Dynamic Analysis," Working Papers 648, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  15. L. Lambertini, 2000. "The Monopolist's Optimal R&D Portfolio," Working Papers 391, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
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  16. Caminal, Ramón, 2006. "Too Many or Too Few Varieties? The Role of Multiproduct Firms," CEPR Discussion Papers 5938, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  17. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  18. Marcel Boyer & Philippe Mahenc & Michel Moreaux, 2002. "Entry Preventing Locations Under Incomplete Information," CIRANO Working Papers 2002s-15, CIRANO. [Downloadable!]
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  19. Simon Loertscher & Gerd Muehlheusser, 2008. "Dynamic Location Games," Department of Economics - Working Papers Series 1042, The University of Melbourne. [Downloadable!]
  20. Victor Aguirregabiria & Gustavo Vicentini, 2006. "Dynamic Spatial Competition Between Multi-Store Firms," Working Papers tecipa-253, University of Toronto, Department of Economics. [Downloadable!]
  21. L. Lambertini, 2001. "Dynamic Hotelling Monopoly with Product Development," Working Papers 399, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  22. Marcel Boyer & Philippe Mahenc & Michel Moreaux, 1995. "Entry Blockading Locations," CIRANO Working Papers 95s-51, CIRANO. [Downloadable!]
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