Abstract:We study entry into a new market in a model where firms choose when to enter the market. An early entry is profitable because it yields a strategic advantage in the market; however, costs will also be...We study entry into a new market in a model where firms choose when to enter the market. An early entry is profitable because it yields a strategic advantage in the market; however, costs will also be larger owing to interest on the capital cost. It is shown that rent equalization need not occur, and that social welfare may be lower under competition than under pure monopoly. Furthermore, under some circumstances there is a strictly positive probability that the firms enter simultaneously, even in the limit when the period length converges to zero.Read More
Publication Year: 1994
Publication Date: 1994-01-01
Language: en
Type: article
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