Wage-Rise Contract and Entry Deterrence: Bertrand and Cournot

Kazuhiro Ohnishi
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Kazuhiro Ohnishi: Osaka University and Institute for Basic Economic Science

Annals of Economics and Finance, 2007, vol. 8, issue 1, 155-165

Abstract: This paper is based on a two-stage model of an incumbent firm and a potential entrant. We consider two cases in terms of strategic relevance between both firms. We also consider both price-setting competition and quantitysetting competition. Therefore, we examine four cases. Each case is correlated with a prior commitment that generates kinks in the reaction curve of the incumbent firm. We then investigate the entry-deterring equilibrium outcomes resulting from the prior commitment of the incumbent firm in all four cases.

Keywords: Consumption smoothing; Risk sharing; Relative risk aversion; Financial crisis; Generalized method of moments; Panel data (search for similar items in EconPapers)
JEL-codes: C72 D21 L13 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cuf:journl:y:2007:v:8:i:1:p:155-165

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