Spatial Competition, Sequential Entry, and Technology choice
This article introduces technology choice into a Hotelling model of spatial competition. This yields two entry deterrence devices, as well as complex strategic choices for the firms and a rich of industry structure. Depending on cost parameters and market size, firms may choose to over-invest or to under-invest. Industry structure is typically asymmetric either in terms of the locations chosen or the technologies used or in both. I find excessive entry deterrrence, second-mover advantage as well as delegation of entry deterrence. Both the number of firms and the equilibrium prices may be non-monotonic in market size. Larger markets may exhibit higher prices.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tabuchi, Takatoshi & Thisse, Jacques-Francois, 1995.
"Asymmetric equilibria in spatial competition,"
International Journal of Industrial Organization,
Elsevier, vol. 13(2), pages 213-227.
- Tyagi, Rajeev K., 2001. "Cost leadership and pricing," Economics Letters, Elsevier, vol. 72(2), pages 189-193, August.
- Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
- Dixit, Avinash, 1980.
"The Role of Investment in Entry-Deterrence,"
Royal Economic Society, vol. 90(357), pages 95-106, March.
- Dixit, Avinash, 1979. "The Role of Investment in Entry-Deterrence," The Warwick Economics Research Paper Series (TWERPS) 140, University of Warwick, Department of Economics.
- Donnenfeld, S. & Weber, S., 1991.
"Limit Qualities and Entry Deterrence,"
92-4, York (Canada) - Department of Economics.
- Neven, Damien J., 1987. "Endogenous sequential entry in a spatial model," International Journal of Industrial Organization, Elsevier, vol. 5(4), pages 419-434.
- Jeffrey R. Campbell & Hugo A. Hopenhayn, 2003.
"Market size matters,"
Working Paper Series
WP-03-12, Federal Reserve Bank of Chicago.
- Jeffrey R. Campbell & Hugo A. Hopenhayn, 2002. "Market Size Matters," NBER Working Papers 9113, National Bureau of Economic Research, Inc.
- Jeffrey Campbell, 2000. "Market Size Matters," Econometric Society World Congress 2000 Contributed Papers 1225, Econometric Society.
- Church, Jeffrey & Ware, Roger, 1996. "Delegation, market share and the limit price in sequential entry models," International Journal of Industrial Organization, Elsevier, vol. 14(5), pages 575-609, July.
- Bresnahan, T.F & Reiss, P.C., 1989.
"Entry And Competition In Concentrated Markets,"
151, Stanford - Studies in Industry Economics.
- McLean, Richard P. & Riordan, Michael H., 1989. "Industry structure with sequential technology choice," Journal of Economic Theory, Elsevier, vol. 47(1), pages 1-21, February.
- Pepall, Lynne, 1992. "Strategic Product Choice and Niche Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(2), pages 397-417, Summer.
- Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 383-401.
- Gupta, Barnali, 1992. "Sequential entry and deterrence with competitive spatial price discrimination," Economics Letters, Elsevier, vol. 38(4), pages 487-490, April.
- Roger Ware, 1991. "Entry Deterrence," Working Papers 837, Queen's University, Department of Economics.
- Schulz, Norbert & Stahl, Konrad, 1985. "On the non-existence of oligopolistic equilibria in differentiated products spaces," Regional Science and Urban Economics, Elsevier, vol. 15(2), pages 229-243, June.
When requesting a correction, please mention this item's handle: RePEc:vie:viennp:0215. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paper Administrator)
If references are entirely missing, you can add them using this form.