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Endogenous timing with free entry

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  • TESORIERE, Antonio

Abstract

A free entry model with linear costs is considered where firms first choose their entry time and then compete in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry outputconfigurations encompassing one limit-output dominant firm and the Cournot equilibrium with free entry as extreme cases. Sequential entry is never observed. Both Stackelberg and Cournot-like outcomes are sustainable as equilibria however.When the number of incumbents is given, entry is always prevented, and industry output is sometimes larger than the entry preventing level.

Suggested Citation

  • TESORIERE, Antonio, 2006. "Endogenous timing with free entry," LIDAM Discussion Papers CORE 2006093, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2006093
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2006.html
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    References listed on IDEAS

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    Cited by:

    1. Federico Etro, 2008. "Stackelberg Competition with Endogenous Entry," Economic Journal, Royal Economic Society, vol. 118(532), pages 1670-1697, October.
    2. Federico Etro, 2006. "Market Leaders and Industrial Policy," Working Papers 103, University of Milano-Bicocca, Department of Economics, revised Nov 2006.

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    More about this item

    Keywords

    free entry; market leadership; entry prevention;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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