IDEAS home Printed from https://ideas.repec.org/p/sce/scecf9/124.html
   My bibliography  Save this paper

The Use of Qualitative Research to Develop a Computational Model for Dynamic Entry Deterrence in an Emerging Market

Author

Listed:
  • Jane M. Binner

    (Nottingham Business School)

  • C. B. Lee

    (University of Derby)

  • W. D. Murphy

    (University of Derby)

  • L. R. Fletcher

    (University of Salford)

Abstract

This paper uses qualitative and quantitative methods to develop a mathematical framework for the analysis of strategic entry deterrence. Through a case study analysis, qualitative research is integrated with a pre-existing model based on game theory to gain a greater understanding of an entry deterrence problem in a real life situation. Insights gained from Selten's well known chain store game and a related model proposed by Waagstein are used to highlight the critical importance of enhancing a stock of knowledge and goodwill through strategic investment in information technology based service development. This study proposes a method to evaluate the strategic investment profile that minimizes the total investment required for dynamic entry deterrence. The original contribution of this current work is to refine and adapt a deductive theoretical model to a real life situation. We extend current theories and develop a mathematical framework for entry deterrence through the application of findings from a qualitative case analysis of a single National Health Service pathology laboratory. The effect of a new entrant is modeled as a perturbation of a pre-existing stable Nash-Cournot equilibrium in an oligopoly-type market and is influenced by market forces subject to Government regulation. A major conclusion arising from this research is that the greatest potential for deterrence is investment that both enhances the peripheral attributes of the service provided and complements existing goodwill between purchaser and provider. Within the case study, information technology based service developments were recognized as having the greatest potential as a deterrent.

Suggested Citation

  • Jane M. Binner & C. B. Lee & W. D. Murphy & L. R. Fletcher, 1999. "The Use of Qualitative Research to Develop a Computational Model for Dynamic Entry Deterrence in an Emerging Market," Computing in Economics and Finance 1999 124, Society for Computational Economics.
    • Handle: RePEc:sce:scecf9:124
    as

    Download full text from publisher

    File URL: http://fmwww.bc.edu/cef99/papers/binner.doc.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lee, C. B. & Murphy, W. D. & Fletcher, L. R. & Binner, J. M., 1998. "Dynamic entry deterrence in the UK pathology services market," European Journal of Operational Research, Elsevier, vol. 105(2), pages 296-307, March.
    2. Fudenberg, Drew & Tirole, Jean, 1987. "Understanding Rent Dissipation: On the Use of Game Theory in Industrial Organization," American Economic Review, American Economic Association, vol. 77(2), pages 176-183, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roy Chowdhury, Prabal, 2008. "Bertrand-Edgeworth equilibrium with a large number of firms," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 746-761, May.
    2. Bagwell, Kyle & Wolinsky, Asher, 2002. "Game theory and industrial organization," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 49, pages 1851-1895, Elsevier.
    3. Bettina Klose & Dan Kovenock, 2015. "Extremism drives out moderation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(4), pages 861-887, April.
    4. Billette de Villemeur, Etienne & Ruble, Richard & Versaevel, Bruno, 2014. "Innovation and imitation incentives in dynamic duopoly," MPRA Paper 59453, University Library of Munich, Germany.
    5. Julie A. Caswell & Ronald W. Cotterill, 1988. "Two new theoretical approaches to measuring industry and firm performance," Agribusiness, John Wiley & Sons, Ltd., vol. 4(6), pages 511-520.
    6. Marini, Giovanni & Pannone, Andrea, 2007. "Capital and capacity utilization revisited: A theory for ICT-assisted production systems," Structural Change and Economic Dynamics, Elsevier, vol. 18(2), pages 231-248, June.
    7. Joao Montez & Nicolas Schutz, 2021. "All-Pay Oligopolies: Price Competition with Unobservable Inventory Choices [Extremal Equilibria of Oligopolistic Supergames]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(5), pages 2407-2438.
    8. Schmalensee, Richard L., 1987. "Empirical studies of rivalrous behavior," Working papers 1990-87., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    9. Xiao, Tiaojun & Qi, Xiangtong, 2010. "Strategic wholesale pricing in a supply chain with a potential entrant," European Journal of Operational Research, Elsevier, vol. 202(2), pages 444-455, April.
    10. Boyer, Marcel & Lasserre, Pierre & Moreaux, Michel, 2010. "A Dynamic Duopoly Investment Game under Uncertain Market Growth," TSE Working Papers 10-171, Toulouse School of Economics (TSE).
    11. Menezes, Flavio M. & Quiggin, John, 2010. "Markets for influence," International Journal of Industrial Organization, Elsevier, vol. 28(3), pages 307-310, May.
    12. Ben Kriechel & Thomas Ziesemer, 2009. "The environmental Porter hypothesis: theory, evidence, and a model of timing of adoption," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(3), pages 267-294.
    13. Marcel Boyer & Pierre Lasserre & Thomas Mariotti & Michel Moreaux, 2000. "Preemption and Rent Dissipation with Multiple Investments," CIRANO Working Papers 2000s-06, CIRANO.
    14. Bruno Versaevel, 2009. "Cumulative Leadership and Entry Dynamics," Post-Print halshs-00371847, HAL.
    15. David P. Myatt, 2005. "Instant Exit from the Asymmetric War of Attrition," Economics Series Working Papers 160, University of Oxford, Department of Economics.
    16. Min-Hung Tsay, 2012. "Preemption and rent equalization in the adoption of new technology: comment," Economics Bulletin, AccessEcon, vol. 32(2), pages 1680-1686.
    17. Bruno Versaevel, 2015. "Alertness, Leadership, and Nascent Market Dynamics," Dynamic Games and Applications, Springer, vol. 5(4), pages 440-466, December.
    18. Amir, Rabah & Lambson, Val E., 2003. "Entry, exit, and imperfect competition in the long run," Journal of Economic Theory, Elsevier, vol. 110(1), pages 191-203, May.
    19. Jean-Pierre Ponssard, 2004. "Rent Dissipation in Repeated Entry Games: Some New Results," CESifo Working Paper Series 1186, CESifo.
    20. Amir, Rabah & Lambson, Val E., 2007. "Imperfect competition, integer constraints and industry dynamics," International Journal of Industrial Organization, Elsevier, vol. 25(2), pages 261-274, April.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sce:scecf9:124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/sceeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.