A Consumer as an Entrant in the Norwegian Cement Market

Lars Sørgard

Journal of Industrial Economics, 1993, vol. 41, issue 2, 191-204

Abstract: This paper sheds light on the strategy of two entrants in the Norwegian cement market, where both started importing cement. One entrant was an initial consumer of the incumbent's product and, thus, imported for own consumption. The author demonstrates that this type of entrant will undertake a sunk investment to have access to a second supplier in cases where other types of entrants are deterred. Both types of entrants must accept a high import price if the incumbent can purchase the exclusive right to import from foreign suppliers. The author finds that the two observed entry attempts are consistent with the model's predictions. Copyright 1993 by Blackwell Publishing Ltd.

Date: 1993
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