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Capital, Commitment, and Entry Equilibrium

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Author Info
B. Curtis Eaton
Richard G. Lipsey

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Abstract

A primary concern of recent oligopoly literature has been the use of product-specific capital to impose asymmetric market solutions, including the deterrence of entry. This article explores the surprisingly neglected topic of the correspondence between the nature of product-specific capital (PSC) and the properties of entry equilibrium. The nature of PSC determines the type of entry with which firms must be concerned (predatory entry, where the entrant replaces an existing firm, or augmenting entry, where the entrant does not), the instruments available to effect asymmetry, the ability to impose asymmetric solutions, and their profitability.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 12 (1981)
Issue (Month): 2 (Autumn)
Pages: 593-604
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Handle: RePEc:rje:bellje:v:12:y:1981:i:autumn:p:593-604

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  1. Carl Davidson & Raymond Deneckere, 1984. "Excess Capacity and Collusion," Discussion Papers 675, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
    • Davidson, Carl & Deneckere, Raymond J, 1990. "Excess Capacity and Collusion," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 521-41, August. [Downloadable!] (restricted)
  2. Robin Boadway & Jean-Francois Tremblay, 2003. "Public Economics and Startup Entrepreneurs," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  3. Michael Waldman, 1985. "Noncooperative Entry Deterrence, Uncertainty, and the Free Rider Problem," UCLA Economics Working Papers 364, UCLA Department of Economics. [Downloadable!]
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  4. Fershtman, C. & Zeeuw, A. de, 1996. "Tradeable emission permits in oligopoly," Discussion Paper 30, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  5. Marcel Boyer & Pierre Lasserre & Thomas Mariotti & Michel Moreaux, 2000. "Preemption and Rent Dissipation with Multiple Investments," CIRANO Working Papers 2000s-06, CIRANO. [Downloadable!]
  6. Michael Waldman, 1983. "Limited Collusion and Entry Deterence," UCLA Economics Working Papers 306, UCLA Department of Economics. [Downloadable!]
  7. Kyle Bagwell & Garey Ramey, 1990. "Capacity, Entry and Forward Induction," Discussion Papers 888, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  8. Marcel Boyer & Pierre Lasserre & Thomas Mariotti & Michel Moreaux, 2001. "Preemption and Rent Dissipation under Bertrand Competition," Cahiers de recherche du Département des sciences économiques, UQAM 20-04, Université du Québec à Montréal, Département des sciences économiques. [Downloadable!]
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