Endogenous timing with free entry

Antonio Tesoriere

No 2006093, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: A free entry model with linear costs is considered where firms first choose their entry time and then compete in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry outputconfigurations encompassing one limit-output dominant firm and the Cournot equilibrium with free entry as extreme cases. Sequential entry is never observed. Both Stackelberg and Cournot-like outcomes are sustainable as equilibria however.When the number of incumbents is given, entry is always prevented, and industry output is sometimes larger than the entry preventing level.

Keywords: free entry; market leadership; entry prevention (search for similar items in EconPapers)
JEL-codes: L11 L13 (search for similar items in EconPapers)
Date: 2006-10
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Citations: View citations in EconPapers (3)

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