Raising Rivals' Fixed Cost

Matthew Olczak
Additional contact information
Matthew Olczak: Centre for Competition Policy

No 2005-01, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: This paper analyses the strategic use of fixed costs to deter entry or monopolize a market in a standard Cournot framework. First of all a general case shows how the presence of fixed costs can affect the possible equilibria to the Cournot game. It is shown that the presence of a firm with a first-mover advantage can have important implications if fixed costs are raised. In addition the forward induction process becomes important in determining plausible equilibria. The use of firstly regulation and secondly 'nuisance' law-suits are considered as strategies to increase fixed costs.

Keywords: Fixed costs; Raising Rivals' Costs; Entry deterrence; Monopolization; Regulation; Nuisance law-suits. (search for similar items in EconPapers)
JEL-codes: L13 L41 L51 (search for similar items in EconPapers)
Date: 2005-01-01
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ueaeco.github.io/working-papers/papers/ccp/CCP-05-01.pdf main text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2005_01

Ordering information: This working paper can be ordered from
Juliette Hardman, Center for Competition Policy, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK

Access Statistics for this paper

More papers in Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Juliette Hardmad ().