Stackelberg Competition with Endogenous Entry

Federico Etro ()

Economic Journal, 2008, vol. 118, issue 532, 1670-1697

Abstract: I characterise endogenous market structures where leaders have a first-mover advantage and entry is endogenous. Leaders are always more aggressive than the followers, independently from strategic substitutability or complementarity. Under quantity competition, leaders produce more than any follower and I determine the conditions for entry-deterrence (high substitutability and non-increasing marginal costs). Under price competition, leaders set lower prices than the followers (the opposite than with an exogenous number of firms). In contests, leaders invest more than each follower. In all these cases a leadership improves the allocation of resources compared to the Nash equilibrium with endogenous entry. Copyright © The Author(s). Journal compilation © Royal Economic Society 2008.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (70)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Stackelberg Competition with Endogenous Entry (2008)
Working Paper: Stackelberg competition with endogenous entry (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:118:y:2008:i:532:p:1670-1697

Ordering information: This journal article can be ordered from
http://www.blackwell ... al.asp?ref=0013-0133

Access Statistics for this article

Economic Journal is currently edited by Martin Cripps, Steve Machin, Woulter den Haan, Andrea Galeotti, Rachel Griffith and Frederic Vermeulen

More articles in Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().