Entry Mistakes with strategic Pricing

Bernardino Adao

Annals of Economics and Statistics, 2003, issue 70, 181-197

Abstract: This paper concerns entry mistakes when the incumbent practices strategic pricing. Due to an agency problem between the owner and the manager of the entrant firm there may be equilibria with too much entry that are preferred by both the entrant and the incumbent. This result is surprising because it would be expected that the entrant would prefer to know the type of incumbent in the industry before he takes his decision.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2003:i:70:p:181-197

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