Model Entry and Exit in a Differentiated-Product Industry: The Personal Computer Market

Joanna Stavins

The Review of Economics and Statistics, 1995, vol. 77, issue 4, 571-84

Abstract: Entry and exit literature focuses almost exclusively on firm-level decisions, leaving out an important aspect of firm behavior: whether to introduce new models while the firm produces similar goods and where to locate them in the existing product space, taking into account own models and the possibility of new entry. This paper analyzes model entry and exit decisions in the case of the personal computer market. Differences in new model spatial location between incumbents and entrants are found, while both model overpricing and firm reputation are found to be significant in the probability of model's exit estimation. Copyright 1995 by MIT Press.

Date: 1995
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