Entry deterrence in the Schmalensee-Salop model

Michael Geisler and Harald Wiese

Applied Economics Letters, 2006, vol. 13, issue 2, 127-130

Abstract: The question of entry deterrence in a Schmalensee type product differentiation market, that is in a market that can be depicted by a circle with circumference of 1, is investigated. It is normally assumed that incumbent firms or brands locate equidistantly whereas an entrant settles exactly in the middle between two firms. For questions of entry deterrence it has become customary to treat the n + 1 model with n incumbents and one entrant as if there were 2n firms located equidistantly. For this to hold, strong assumptions are needed. Using the Salop specification of the Schmalensee model, but without these strong assumptions, the number of entry deterring firms is calculated.

Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.informaworld.com/openurl?genre=article& ... 40C6AD35DC6213A474B5 (text/html)
Access to full text is restricted to subscribers.

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:taf:apeclt:v:13:y:2006:i:2:p:127-130

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504850500392131

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().