Advertising and Entry Deterrence: How the Size of the Market Matters
AbstractWe analyze the relationship between market size and entry when an incumbent and potentially an entrant compete to gain market share and advertising is the only strategic variable. Entry occurs when the relative effectiveness of incumbent's advertising is smaller than a threshold level that depends on the size of the market. This threshold level is monotonically and positively related to market size. Consequently, equilibrium with entry is more likely the greater is the size of the market.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 22620.
Date of creation: Feb 2007
Date of revision: Nov 2007
Publication status: Published in International Journal of Business and Economics 3.6(2007): pp. 199-206
advertising; entry; market size;
Other versions of this item:
- Bennour, Khaled, 2006. "Advertising and entry deterrence: how the size of the market matters," MPRA Paper 17233, University Library of Munich, Germany, revised 07 Feb 2007.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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.:
- Schmalensee, Richard, 1976. "A Model of Promotional Competition in Oligopoly," Review of Economic Studies, Wiley Blackwell, vol. 43(3), pages 493-507, October.
- Glenn Ellison & Sara Fisher Ellison, 2007.
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NBER Working Papers
13069, National Bureau of Economic Research, Inc.
- Glenn Ellison & Sara Fisher Ellison, 2011. "Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration," American Economic Journal: Microeconomics, American Economic Association, vol. 3(1), pages 1-36, February.
- Hirshleifer, Jack, 1995. "Anarchy and Its Breakdown," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 26-52, February.
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