Entry preventing locations under incomplete information
AbstractWe show that, under asymmetric information about costs, limit location strategies, that is distortions in pre-entry locations created by the entrant's inference about the incumbent's cost advantage which prevent entry, emerge not only as the result of the incumbent's cost advantage but also as the result of the entrant's beliefs concerning this advantage. The location at the market center may deter entry under incomplete information for a high cost incumbent who would accommodate entry under complete information; moreover, a low cost incumbent deterring entry at that location under complete information may be better off accommodating entry under incomplete information. Nous montrons qu'en prÃ©sence d'information asymÃ©trique sur les coÃ»ts, les stratÃ©gies de localisation limite, c'est-Ã -dire les distorsions dans les localisations permettant Ã la firme Ã©tablie d'empÃªcher l'entrÃ©e, rÃ©sultent non seulement de l'avantage coÃ»t de la firme Ã©tablie mais aussi des croyances de l'entrant concernant cet avantage. La localisation au centre du marchÃ© peut dissuader d'entrer, si l'on se trouve en information incomplÃ¨te et en prÃ©sence d'une firme Ã©tablie encourant un coÃ»t Ã©levÃ©. Cette mÃªme firme accepterait l'entrÃ©e en information complÃ¨te. De plus, une firme Ã©tablie, encourant un coÃ»t faible dissuadant l'entrÃ©e Ã cette localisation en information complÃ¨te, aurait intÃ©rÃªt Ã accepter l'entrÃ©e si elle se trouvait en information incomplÃ¨te.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 21 (2003)
Issue (Month): 6 (June)
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Web page: http://www.elsevier.com/locate/inca/505551
Other versions of this item:
- Marcel Boyer & Philippe Mahenc & Michel Moreaux, 2002. "Entry Preventing Locations Under Incomplete Information," CIRANO Working Papers 2002s-15, CIRANO.
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