IDEAS home Printed from https://ideas.repec.org/p/nwu/cmsems/577.html
   My bibliography  Save this paper

Credible Spatial Preemption

Author

Listed:
  • Kenneth L. Judd

Abstract

It is often argued that incumbent firms may deter entry by preemptive investment in new goods. We show that these conclusions are reserved when multiproduct incumbent firms may exit in response to entry. Once entrants are in an industry, an incumbent will often want to withdraw some goods to prevent competition with the entrant from reducing profits on other goods. Such a reaction makes entry more attractive to a potential entrant. The equilibrium industry structure is less likely to be monopolistic as the goods are better substitutes, as exit costs are low, and as the competition between producers of the same good is more intense.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Kenneth L. Judd, 1983. "Credible Spatial Preemption," Discussion Papers 577, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  • Handle: RePEc:nwu:cmsems:577
    as

    Download full text from publisher

    File URL: http://www.kellogg.northwestern.edu/research/math/papers/577.pdf
    File Function: main text
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nwu:cmsems:577. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fran Walker (email available below). General contact details of provider: https://edirc.repec.org/data/cmnwuus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.