Advertising and entry deterrence: how the size of the market matters
AbstractSchmalensee (1974) shows that, when the cost functions of the advertising e¤ort are linear, the monopoly position is only sustained when the advertising�s e¤ectiveness of the incumbent is relatively high. We show that this result does not hold in a more general nonlinear cost. The no-entry equilibrium may hold even when the relative e¤ectiveness of the incumbent is low. This happens when the size of the market is su¢ ciently low.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17233.
Date of creation: 2006
Date of revision: 07 Feb 2007
Publication status: Published in International Journal of Business and Economics 3.6(2007): pp. 199-206
Advertising; Entry; Market seize;
Other versions of this item:
- Khaled Bennour, 2007. "Advertising and Entry Deterrence: How the Size of the Market Matters," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 6(3), pages 199-206, December.
- Bennour, Khaled, 2007. "Advertising and Entry Deterrence: How the Size of the Market Matters," MPRA Paper 22620, University Library of Munich, Germany, revised Nov 2007.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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