Entry in a Stackelberg perfect equilibrium
AbstractThis paper considers welfare effects of entry when the incumbent firm behaves like a Stackelberg leader in the product market. In contrast to the existing literature, we show that entry may increase welfare for any cost asymmetries between the firms. Using a general demand function we show the condition for welfare improving entry.
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Bibliographic InfoArticle provided by AccessEcon in its journal Economics Bulletin.
Volume (Year): 12 (2007)
Issue (Month): 33 ()
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Cournot competition Entry Stackelberg competition Welfare;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D3 - Microeconomics - - Distribution
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Endogenous Stackelberg leadership,"
Open Access publications from Tilburg University, Tilburg University
urn:nbn:nl:ui:12-154410, Tilburg University.
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- Damme, E.E.C. van & Hurkens, S., 1998. "Endogenous Stackelberg leadership," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-80496, Tilburg University.
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- Suzumura, Kotaro & Kiyono, Kazuharu, 1987. "Entry Barriers and Economic Welfare," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 54(1), pages 157-67, January.
- Stiglitz, Joseph E, 1981. "Potential Competition May Reduce Welfare," American Economic Review, American Economic Association, American Economic Association, vol. 71(2), pages 184-89, May.
- C.C. von Weizsaker, 1980. "A Welfare Analysis of Barriers to Entry," Bell Journal of Economics, The RAND Corporation, The RAND Corporation, vol. 11(2), pages 399-420, Autumn.
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