On the Existence of Predatory Pricing: An Experimental Study of Reputation and Entry Deterrence in the Chain-Store Game

Yun Joo Jung, John Kagel and Dan Levin ()

RAND Journal of Economics, 1994, vol. 25, issue 1, 72-93

Abstract: A single monopolist plays a sequence of eight periods against a series of different entrants. There are two types of monopolists, "weak" monopolists whose single-period best response is to acquiesce after entry, and "strong" monopolists whose dominant strategy is to fight entry. Data show high levels of predatory pricing, defined as weak monopolists fighting all entrants in early periods, both with and without experimenter-induced strong monopolists. We reject a number of predictions of the asymmetric-information, sequential equilibrium model of Kreps and Wilson (1982) and find important deviations from more general sequential equilibrium models as well.

Date: 1994
References: Add references at CitEc
Citations: View citations in EconPapers (54)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819942 ... O%3B2-3&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
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:rje:randje:v:25:y:1994:i:spring:p:72-93

Ordering information: This journal article can be ordered from
https://editorialexp ... i-bin/rje_online.cgi

Access Statistics for this article

More articles in RAND Journal of Economics from The RAND Corporation
Bibliographic data for series maintained by ().