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Strategic Entry and Potential Competition: Evidence from Compressed Gas Fuel Retail

Giulia Pavan, Andrea Pozzi and Gabriele Rovigatti ()

No 12113, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the effect of competition on preemption incentives. An unexpected change in regulation in the Italian retail market for compressed natural gas fuel allows us to identify the potential entrants and creates exogenous variation in their number. We document that markets with a larger pool of potential competitors experience faster entry. We provide evidence suggesting that this occurs because a larger number of potential entrants raises firms' incentives to preempt.

Keywords: potential entrants; preemption; retail fuel market (search for similar items in EconPapers)
JEL-codes: L12 L22 L81 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-com, nep-ene and nep-ind
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Related works:
Journal Article: Strategic entry and potential competition: Evidence from compressed gas fuel retail (2020) Downloads
Working Paper: Strategic Entry and Potential Competition - Evidence from Compressed Gas Fuel Retail (2017) Downloads
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