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

Giulia Pavan, Andrea Pozzi and Gabriele Rovigatti ()
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Giulia Pavan: Toulouse School of Economics

No 1709, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

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 to the market and creates exogenous variation in their number. We document that areas with a larger pool of potential competitors experience faster entry. We provide evidence suggesting that this occurs because facing a higher number of potential entrants raises firms' incentives to preempt.

Pages: 34 pages
Date: 2017, Revised 2017-06
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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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