Entry Deterrence Strategies

This lecture on entry is a transcript of a second-year MBA class at the Stephen M. Ross School of Business, University of Michigan. At various points, student comments and comments by Francine Lafontaine, the co-teacher of this course, appear. Accompanying this lecture are the PowerPoint slides and various film clips from the lecture. This lecture provides an overview for MBA students of several entry deterrence strategies and their treatment under United States antitrust laws. The lecture begins with an examination of predatory pricing and an introduction to sequential games. This is followed by brief discussions of several other strategies (including limit pricing and raising rivals' costs), with business applications. The lecture concludes with a discussion of how dominant firms can legally compete, both in the U.S. and in Europe.