Weak Entrants are Welcome
AbstractThis paper investigates the decision problem of an incumbent firm confronted by both a weak and a strong entrant in a differentiated market. Suppose that the incumbent can deter entry of the weak firm, but cannot deter entry of the strong firm by itself. Then the incumbent may allow entry of the weak firm and use it to alter the strong firm's entry decision. The present paper formalizes this idea, and it sheds new light on the fact that domestic firms are sometimes able to block strong foreign firms after trade loberalization. The idea also expalins why a dominant firm lets fringe firms be in the market.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoPaper provided by Institute of Social and Economic Research, Osaka University in its series ISER Discussion Paper with number 0468.
Length: 38 pages
Date of creation: 1998
Date of revision:
MARKETS STRUCTURES ; BUSINESS ORGANIZATION ; PROTECTIONISM;
Other versions of this item:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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.:
- Gallini, Nancy T, 1984. "Deterrence by Market Sharing: A Strategic Incentive for Licensing," American Economic Review, American Economic Association, vol. 74(5), pages 931-41, December.
- Elie Appelbaum & Chin Lim, 1985. "Contestable Markets under Uncertainty," RAND Journal of Economics, The RAND Corporation, vol. 16(1), pages 28-40, Spring.
- Crampes, C. & Hollander, A., 1990.
"Umbrella Pricing to Attract Early Entry,"
Cahiers de recherche
9006, Universite de Montreal, Departement de sciences economiques.
- Gilbert, Richard & Vives, Xavier, 1986. "Entry Deterrence and the Free Rider Problem," Review of Economic Studies, Wiley Blackwell, vol. 53(1), pages 71-83, January.
- Martinez-Giralt, Xavier & Neven, Damien J, 1988. "Can Price Competition Dominate Market Segmentation?," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 431-42, June.
- repec:fth:osakae:476 is not listed on IDEAS
- Berck, Peter & Perloff, Jeffrey M., 1988.
"The dynamic annihilation of a rational competitive fringe by a low-cost dominant firm,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 12(4), pages 659-678, November.
- Berck, Peter & Perloff, Jeffrey M, 1987. "The Dynamic Annihilation of a Rational Competitive Fringe by a Low-cost Dominant Firm," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt6926m79z, Department of Agricultural & Resource Economics, UC Berkeley.
- Brander, James A & Eaton, Jonathan, 1984.
"Product Line Rivalry,"
American Economic Review,
American Economic Association, vol. 74(3), pages 323-34, June.
- Bonanno, Giacomo, 1987. "Location Choice, Product Proliferation and Entry Deterrence," Review of Economic Studies, Wiley Blackwell, vol. 54(1), pages 37-45, January.
- Vives, Xavier, 1988. "Sequential entry, industry structure and welfare," European Economic Review, Elsevier, vol. 32(8), pages 1671-1687, October.
- Neven, Damien J., 1987. "Endogenous sequential entry in a spatial model," International Journal of Industrial Organization, Elsevier, vol. 5(4), pages 419-434.
- repec:fth:osakae:468 is not listed on IDEAS
- Toshihiro Matsumura & Noriaki Matsushima, 2009. "Cost differentials and mixed strategy equilibria in a Hotelling model," The Annals of Regional Science, Springer, vol. 43(1), pages 215-234, March.
- Ishibashi, Ikuo, 2003. "A note on credible spatial entry deterrence," International Journal of Industrial Organization, Elsevier, vol. 21(2), pages 283-289, February.
- Junichiro Ishida & Toshihiro Matsumura & Noriaki Matsushima, 2011.
"Market Competition, R&D And Firm Profits In Asymmetric Oligopoly,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 59(3), pages 484-505, 09.
- Junichiro Ishida & Toshihiro Matsumura & Noriaki Matsushima, 2010. "Market Competition, R&D and Firm Profits in Asymmetric Oligopoly," ISER Discussion Paper 0777, Institute of Social and Economic Research, Osaka University.
- Kitamura, Hiroshi, 2010. "Exclusionary vertical contracts with multiple entrants," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 213-219, May.
- Aidan Hollis, 2003. "The Anti-Competitive Effects of Brand-Controlled "Pseudo- Generics" in the Canadian Pharmaceutical Market," Canadian Public Policy, University of Toronto Press, vol. 29(1), pages 21-31, March.
- Jun, Byoung Heon & Park, In-Uck, 2010.
Hitotsubashi Journal of Economics,
Hitotsubashi University, vol. 51(2), pages 1-22, December.
- Murooka, Takeshi, 2013. "A note on credible spatial preemption in an entry–exit game," Economics Letters, Elsevier, vol. 118(1), pages 26-28.
- Magazzini, Laura & Pammolli, Fabio & Riccaboni, Massimo, 2004. "Dynamic Competition in Pharmaceuticals: Patent Expiry, Generic Penetration, and Industry Structure," MPRA Paper 15968, University Library of Munich, Germany.
- Laura Magazzini & Fabio Pammolli & Gianluca Papa & Nicola Carmine Salerno, 2005. "Generici vs. Branded: confronto internazionale su prodotti off-patent rimborsati dal SSN," Working Papers 01-2005, Competitività Regole Mecati (CERM).
- Hiroshi Kitamura, 2008. "Exclusionary Vertical Contracts with Multiple Entrants," Discussion Papers in Economics and Business 08-39, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
- Heide Coenen, 2000. "Network Effects in Telecommunications: When Entrants are Welcome," Discussion Papers 241, Government Institute for Economic Research Finland (VATT).
- Laura Magazzini & Fabio Pammolli & Massimo Riccaboni, 2004. "Dynamic competition in pharmaceuticals," The European Journal of Health Economics, Springer, vol. 5(2), pages 175-182, May.
- Ashiya, M., 1999. "Brand Proliferation is Useless to Deter Entry," ISER Discussion Paper 0476, Institute of Social and Economic Research, Osaka University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Fumiko Matsumoto).
If references are entirely missing, you can add them using this form.