Limit Qualities and Entry Deterrence

Shabtai Donnenfeld and Shlomo Weber ()

RAND Journal of Economics, 1995, vol. 26, issue 1, 113-130

Abstract: In this article, we investigate how the interplay of competition among incumbents and the magnitude of a potential entrant's setup cost determines the configuration of the array of products to be offered in a perfect Nash equilibrium. We show that incumbents can use limit qualities to deter entry. We also demonstrate that rivalry among incumbents may lead to excessive entry deterrence. Our analysis generates predictions about the correlation between the degree of product differentiation and the size of the entrant's setup costs.

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (48)

Downloads: (external link)
http://links.jstor.org/sici?sici=0741-6261%2819952 ... O%3B2-L&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
Working Paper: Limit Qualities and Entry Deterrence (1991)
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:26:y:1995:i:spring:p:113-130

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 ().