Equilibrium Uniqueness in Entry Games with Private Information

Jos'-Antonio Esp'n-S'nchez (), Alvaro Parra and Yuzhou Wang
Additional contact information
Jos'-Antonio Esp'n-S'nchez: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/jose-antonio-espin-sanchez
Yuzhou Wang: Department of Economics, Yale University
Authors registered in the RePEc Author Service: José-Antonio Espín-Sánchez

No 2126R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We study equilibrium uniqueness in entry games with private information. Our framework embeds models commonly used in applied work, allowing rich forms of firm heterogeneity and selective entry. We introduce the notion of strength, which summarizes a firm's ability to endure competition. In environments of applied interest, an equilibrium in which entry strategies are ranked according to strength, called herculean equilibrium, always exists. Thus, when the entry game has a unique equilibrium, it must be herculean. We derive simple sufficient conditions guaranteeing equilibrium uniqueness and, consequently, robust counterfactual analyses.

Keywords: Entry; Oligopolistic markets; Private Information (search for similar items in EconPapers)
Pages: 55 pages
Date: 2018-04, Revised 2021-05
Note: Includes supplemental material
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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