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Optimal entry deterrence under uncertainty

Author

Listed:
  • Richard F. Hartl

    (University of Vienna)

  • Peter M. Kort

    (Tilburg University)

  • Stefan Wrzaczek

    (International Institute for Applied Systems Analysis (IIASA)
    Wittgenstein Centre for Demography and Global Human Capital (IIASA, VID/OeAW, University of Vienna))

Abstract

The objective of this paper is to analyze an incumbent–entrant model under uncertainty. The entrant observes the realization of the random variable(s) prior to making decisions regarding market entry and capacity selection, leaving the uncertainty entirely on the incumbent’s side. The sources of this uncertainty pertain to the characteristics of the entrant’s product and the entry costs the entrant must incur before becoming operational. The key findings indicate that uncertainty generally enhances entry, and, apart from blockaded entry, entry deterrence and accommodated entry, the incumbent can pursue entry deterrence with a certain probability.

Suggested Citation

  • Richard F. Hartl & Peter M. Kort & Stefan Wrzaczek, 2025. "Optimal entry deterrence under uncertainty," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 33(2), pages 391-413, June.
    • Handle: RePEc:spr:cejnor:v:33:y:2025:i:2:d:10.1007_s10100-025-00966-z
    DOI: 10.1007/s10100-025-00966-z
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    References listed on IDEAS

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    Cited by:

    1. Gustav Feichtinger & Christophe Deissenberg & Ulrike Leopold-Wildburger, 2025. "George Leitmann’s 100th birthday," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 33(2), pages 333-344, June.

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