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To acquire, or to compete? An entry dilemma

Author

Listed:
  • Jean Gabszewicz

  • Didier Laussel

    (Université de la Méditerrannée; chateau La Farge, Les Milles (France))

  • Ornella Tarola

    (Department of Economic Theory - Sapienza University of Rome (Italy))

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

  • Jean Gabszewicz & Didier Laussel & Ornella Tarola, 2010. "To acquire, or to compete? An entry dilemma," Working Papers 4/10, Sapienza University of Rome, DISS.
    • Handle: RePEc:saq:wpaper:4/10
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    File URL: http://www.diss.uniroma1.it/sites/default/files/allegati/wp-04-10-banking_JICT_wpdte_2.pdf
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    Citations

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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. Gabszewicz Jean J. & Marini Marco A. & Tarola Ornella, 2019. "Endogenous Mergers in Markets with Vertically Differentiated Products," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(1), pages 1-22, January.
    3. 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.
    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.
    5. Chrysovalantou Milliou & Apostolis Pavlou, 2020. "Foreign direct investment in vertically related markets," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(1), pages 284-320, February.
    6. Chrysovalantou Milliou & Apostolis Pavlou, 2014. "Foreign Direct Investment Modes and Local Backward Linkages," CESifo Working Paper Series 4623, CESifo.

    More about this item

    Keywords

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L8 - Industrial Organization - - Industry Studies: Services

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