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Entry deterrence and antibiotic conservation under post-entry Bertrand competition

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  • Roberto Mazzoleni
  • Hamza Virk

Abstract

We analyze how an incumbent antibiotic monopolist responds to the threat of post-entry Bertrand competition by a vertically differentiated rival. In a two-period model where current production drives future resistance, Bertrand competition leads to a winner-take-all outcome. We find that strategic deterrence is optimal regardless of bacterial cross-resistance to prospective rival drugs. In contrast with post-entry Cournot competition, anticipated price competition provides the incumbent with a stronger strategic incentive for conservation.

Suggested Citation

  • Roberto Mazzoleni & Hamza Virk, 2025. "Entry deterrence and antibiotic conservation under post-entry Bertrand competition," Papers 2512.05261, arXiv.org.
    • Handle: RePEc:arx:papers:2512.05261
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    File URL: http://arxiv.org/pdf/2512.05261
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