Limit pricing and multi-market entry

In this paper we analyse limit pricing by an incumbent when faced by a multi-market entrant which can produce (subject to a constraint) in several markets simultaneously. We find that using three sizes of fixed costs, signalling occurs in even when entry cannot be deterred and that the limit price is also dependent on the ifxed entry cost and the priorbeliefs of the entrant. Pooling occurs only for the two highest fixed costs and we can obtain separating and pooling at the same time in different markets. However, the abiblity to pool in one market ensures a no-distortion separating equilibrium in the other market.