IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v57y2009i2p343-352.html

Credible Retaliatory Entry And Strategic Toe‐Holds

Author

Listed:
  • Zhiqi Chen
  • Thomas W. Ross

Abstract

The anticipated profits from entry by an established firm into a new market will depend on how incumbents in that market are expected to respond. One possibility, suggested by cases and the literature, is that an incumbent may respond with ‘retaliatory entry’ into the first entrant's ‘home’ market. The model presented here describes conditions under which this can be a credible threat that deters the first entry. When the conditions are such that it is not credible, the paper shows how firms can provide credibility through the establishment of toe‐hold investments in other markets.

Suggested Citation

  • Zhiqi Chen & Thomas W. Ross, 2009. "Credible Retaliatory Entry And Strategic Toe‐Holds," Journal of Industrial Economics, Wiley Blackwell, vol. 57(2), pages 343-352, June.
    • Handle: RePEc:bla:jindec:v:57:y:2009:i:2:p:343-352
    DOI: 10.1111/j.1467-6451.2009.00376.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-6451.2009.00376.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-6451.2009.00376.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
    2. Edward M Graham, 1998. "Market Structure and the Multinational Enterprise: A Game-theoretic Approach1," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(1), pages 67-83, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhiqi Chen & Thomas Ross, 2007. "Markets Linked by Rising Marginal Costs: Implications for Multimarket Contact, Recoupment, and Retaliatory Entry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 31(1), pages 1-21, August.

    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. Keith Head & Thierry Mayer & John Ries, 2002. "Revisiting Oligopolistic Reaction: Are Decisions on Foreign Direct Investment Strategic Complements?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(3), pages 453-472, September.
    2. repec:spo:wpmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8o1o6tag is not listed on IDEAS
    3. repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g8o1o6tag is not listed on IDEAS
    4. Heyes, Anthony & Kapur, Sandeep, 2009. "Enforcement missions: Targets vs budgets," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 129-140, September.
    5. Kazuhiro Ohnishi, 2011. "Two-Stage Quantity-Setting Games and Tacit Collusion," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 64-77, Spring.
    6. Juan‐Pablo Montero & Juan Ignacio Guzman, 2010. "Output‐Expanding Collusion In The Presence Of A Competitive Fringe," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 106-126, March.
    7. Rodney Beard, 2015. "N-Firm Oligopoly With General Iso-Elastic Demand," Bulletin of Economic Research, Wiley Blackwell, vol. 67(4), pages 336-345, October.
    8. Michael Cohen & Rui Huang, 2012. "Corporate Social Responsibility for Kids’ Sake: A Dynamic Model of Firm Participation," Working Papers 12, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    9. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    10. María Fernanda Viecens, 2009. "Compatibility with Firm Dominance," Working Papers 2009-12, FEDEA.
    11. Frank Stähler & Thorsten Upmann, 2008. "Market Entry Regulation and International Competition," Review of International Economics, Wiley Blackwell, vol. 16(4), pages 611-626, September.
    12. Marc Escrihuela-Villar & Ramon Faulí-Oller, 2008. "Mergers in asymmetric Stackelberg markets," Spanish Economic Review, Springer;Spanish Economic Association, vol. 10(4), pages 279-288, December.
    13. L. Lambertini & G. Rossini, 1995. "Are Labor-Managed Firms Really Able to Survive Competition With Profit-Maximizing Firms?," Working Papers 222, Dipartimento Scienze Economiche, Universita' di Bologna.
    14. Mário Alexandre Patrício Martins da Silva, 2016. "R&D investments and spillovers under endogenous technological opportunity," FEP Working Papers 571, Universidade do Porto, Faculdade de Economia do Porto.
    15. Ganesh Iyer & T. Tony Ke, 2022. "Competitive Algorithmic Targeting and Model Selection," NBER Chapters, in: Economics of Artificial Intelligence, National Bureau of Economic Research, Inc.
    16. Bletschacher, Georg & Klodt, Henning, 1992. "Strategische Handels- und Industriepolitik: theoretische Grundlagen, Branchenanalysen und wettbewerbspolitische Implikationen," Open Access Publications from Kiel Institute for the World Economy 456, Kiel Institute for the World Economy (IfW Kiel).
    17. Schulz, Bastian, 2024. "Labor market dynamics with sorting," Journal of Economic Dynamics and Control, Elsevier, vol. 158(C).
    18. Özgür Yýlmaz, 2012. "The Strategic Advantage of Inequality Averse Preferences," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 26(2), pages 83-91.
    19. Andreas HaufLer & Guttorm Schjelderup & Frank Stähler, 2005. "Barriers to Trade and Imperfect Competition: The Choice of Commodity Tax Base," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(3), pages 281-300, May.
    20. Marco Marini & Alberto Zevi, 2011. "‘Just one of us’: consumers playing oligopoly in mixed markets," Journal of Economics, Springer, vol. 104(3), pages 239-263, November.
    21. Maya Eden, 2017. "Misallocation and the Distribution of Global Volatility," American Economic Review, American Economic Association, vol. 107(2), pages 592-622, February.
    22. Lau, Sau-Him Paul, 2001. "Aggregate Pattern of Time-dependent Adjustment Rules, II: Strategic Complementarity and Endogenous Nonsynchronization," Journal of Economic Theory, Elsevier, vol. 98(2), pages 199-231, June.

    More about this item

    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:bla:jindec:v:57:y:2009:i:2:p:343-352. 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: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    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.