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The Contestability Paradigm in the Presence of Vertical Differentiation: Entering the Incumbent's Quality Niche

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  • L. Lambertini

Abstract

The aim of this paper is to analyse the interaction between vertical differentiation and contestability in the context of a repeated game with discounting. It is shown that, if consumers retaliate after hit-and-round entry and suppliers and reasonably low discount rates, contestability may not hold.

Suggested Citation

  • L. Lambertini, 1992. "The Contestability Paradigm in the Presence of Vertical Differentiation: Entering the Incumbent's Quality Niche," Working Papers 135, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:135
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