Advertising and Entry Deterrence: How the Size of the Market Matters
We analyze the relationship between market size and entry when an incumbent and potentially an entrant compete to gain market share and advertising is the only strategic variable. Entry occurs when the relative effectiveness of incumbent's advertising is smaller than a threshold level that depends on the size of the market. This threshold level is monotonically and positively related to market size. Consequently, equilibrium with entry is more likely the greater is the size of the market.
|Date of creation:||Feb 2007|
|Date of revision:||Nov 2007|
|Publication status:||Published in International Journal of Business and Economics 3.6(2007): pp. 199-206|
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Web page: http://mpra.ub.uni-muenchen.de
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NBER Working Papers
13069, National Bureau of Economic Research, Inc.
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