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To acquire, or to compete? An entry dilemna

Author

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  • GABSZEWICZ, Jean

    (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))

  • LAUSSEL, Didier
  • TAROLA, Ornella

Abstract

In this paper we address the following question: is it more profitable, for an entrant in a differentiated market, to acquire an existing firm than to compete? We illustrate the answer by considering competition in the banking sector.

Suggested Citation

  • GABSZEWICZ, Jean & LAUSSEL, Didier & TAROLA, Ornella, 2008. "To acquire, or to compete? An entry dilemna," CORE Discussion Papers 2008027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2008027
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    File URL: http://www.uclouvain.be/cps/ucl/doc/core/documents/coredp2008_27.pdf
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    References listed on IDEAS

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    Cited by:

    1. Luciano Fanti & Luca Gori, 2013. "Stability Analysis in a Bertrand Duopoly with Different Product Quality and Heterogeneous Expectations," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 481-501, December.
    2. Vera Rocha & Anabela Carneiro & Celeste Amorim Varum, 2013. "Entrepreneurship Dynamics: Entry Routes, Business-Owner's Persistence and Exit Modes," CEF.UP Working Papers 1310, Universidade do Porto, Faculdade de Economia do Porto.
    3. Chrysovalantou Milliou & Apostolis Pavlou, 2014. "Foreign Direct Investment Modes and Local Backward Linkages," CESifo Working Paper Series 4623, CESifo Group Munich.
    4. Vera Rocha & Anabela Carneiro & Celeste Varum, 2015. "Entry and exit dynamics of nascent business owners," Small Business Economics, Springer, vol. 45(1), pages 63-84, June.

    More about this item

    Keywords

    Vertical differentiation; entry; banking competition;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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