This paper considers an incumbent firm that is faced with a potential entrant in a vertically differentiated market. It demonstrates than an incumbent firm cannot prevent entry through product proliferation because of a commitment problem.
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Paper provided by Osaka - Institute of Social and Economic Research in its series Papers with number
476.
Length: 20 pages Date of creation: 1999 Date of revision: Handle: RePEc:fth:osakae:476
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Find related papers by JEL classification: D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets