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Equilibrium uniqueness in entry games with private information

Author

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  • José‐Antonio Espín‐Sánchez
  • Álvaro Parra
  • Yuzhou Wang

Abstract

We study equilibria in static entry games with single‐dimensional private information. Our framework embeds many models commonly used in applied work, allowing for firm heterogeneity and selective entry. We introduce the notion of strength, which summarizes a firm's ability to endure competition. In environments of applied interest, an equilibrium in which entry strategies are ordered according to the firms' strengths always exists. We call this equilibrium herculean. We derive simple and testable sufficient conditions guaranteeing equilibrium uniqueness and, consequently, a unique counterfactual prediction.

Suggested Citation

  • José‐Antonio Espín‐Sánchez & Álvaro Parra & Yuzhou Wang, 2023. "Equilibrium uniqueness in entry games with private information," RAND Journal of Economics, RAND Corporation, vol. 54(3), pages 512-540, September.
  • Handle: RePEc:bla:randje:v:54:y:2023:i:3:p:512-540
    DOI: 10.1111/1756-2171.12449
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    2. Rodrigo Carril & Andres Gonzalez-Lira & Michael S. Walker, 2026. "Competition under Incomplete Contracts and the Design of Procurement Policies," American Economic Review, American Economic Association, vol. 116(2), pages 535-581, February.
    3. Jihwan Do & Jeremy Kettering, 2025. "The Value of Information in Oligopoly with Endogenous Entry," Working papers 2025rwp-253, Yonsei University, Yonsei Economics Research Institute.

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