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The Role of Investment in Entry-Deterrence

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  • Dixit, Avinash

Abstract

The theory of large-scale entry into an industry is made complicated by its game-theoretic aspects. Even in the simplest case of one established firm facing one prospective entrant, there are some subtle strategic interactions. The established firm's pre-entry decisions can influence the prospective entrant's view of what will happen if he enters, and the established firm will try to exploit this possibility to its own advantage.
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Suggested Citation

  • Dixit, Avinash, 1980. "The Role of Investment in Entry-Deterrence," Economic Journal, Royal Economic Society, vol. 90(357), pages 95-106, March.
    • Handle: RePEc:ecj:econjl:v:90:y:1980:i:357:p:95-106
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