On the Effects of Entry under Flexible Production Techniques: An Example of Quasi-Anticompetitiveness
We study reactions to entry in a Cournot model, contrasting the case where firms are endowed with unchangeable technologies against that where technologies are flexible. By the latter we mean that firms can change the installed production technique at zero cost (fully flexible technologies). We show that when firms are technologically flexible, entry can increase equilibrium prices. The analysis is cast in a short-run time horizon to simplify exposition, but its predictive power may better relate to the long run.
|Date of creation:||Jan 2007|
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- Rabah Amir, 2000.
"On the Effects of Entry in Cournot Markets,"
Econometric Society World Congress 2000 Contributed Papers
1475, Econometric Society.
- AMIR, Rabah & LAMBSON, Val, 1999. "On the effects of entry in Cournot markets," CORE Discussion Papers 1999059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Rabah Amir & Val E. Lambson, 1998. "On the Effects of Entry in Cournot Markets," CIE Discussion Papers 1998-06, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- R. J. Ruffin, 1971. "Cournot Oligopoly and Competitive Behaviour," Review of Economic Studies, Oxford University Press, vol. 38(4), pages 493-502.
- Seade, Jesus K, 1980. "On the Effects of Entry," Econometrica, Econometric Society, vol. 48(2), pages 479-89, March.
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