A Sequential Entry Model with Strategic Use of Excess Capacity.

A model of sequential entry with Leontief costs is studied in which demand is isoelastic. Some or all firms may hold excess capacity in the perfect equilibrium to the entry game. Firms with a first-mover advantage trade off the positioning value of a large investment in capacity, leading to a large market share, against the possible costs of bearing the burden of entry deterrence through holding excess capacity in equilibrium.

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Year of publication:	1993
Authors:	Barham, Brad ; Ware, Roger
Published in:	Canadian Journal of Economics. - Canadian Economics Association - CEA. - Vol. 26.1993, 2, p. 286-98
Publisher:	Canadian Economics Association - CEA

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Extent:	text/html
Type of publication:	Article
Notes:	Published
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005609071