Multiple rounds in a chain store game
Michael Melles and
Rainer Nitsche ()
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Michael Melles: Helvetia Insurances
Rainer Nitsche: E.CA Economics and European School of Management and Technology
Theory and Decision, 2016, vol. 81, issue 4, No 6, 579 pages
Abstract:
Abstract In textbook models of reputation, a number of entry games are played sequentially. A multimarket incumbent—the chain store—deters entry of “early” small entrants with a threat of predation. In the last markets of the game, entry occurs stochastically. We show that this stochastic entry is due to a restrictive assumption and vanishes if entrants that initially decided to stay out are allowed to reconsider their decision following entry elsewhere.
Keywords: Multimarket Firms; Entry; Predation; Reputation (search for similar items in EconPapers)
JEL-codes: C72 C73 D82 L1 L41 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:81:y:2016:i:4:d:10.1007_s11238-016-9551-2
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DOI: 10.1007/s11238-016-9551-2
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