Uncertainty and Entry Deterrence

We study a model where capacity installation by an incumbent firm serves to deter others from entering the industry. We argue that uncertainty about demand or costs forces the incumbent to choose a higher capacity level than it would under certainty. This higher level diminishes the attractiveness of deterrence (Proposition 1) and, therefore, the range of parameter values for which deterrence occurs (Proposition 2)

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Year of publication:	2010
Authors:	Maskin, Eric
Publisher:	[S.l.] : SSRN
Subject:	Markteintritt \| Market entry \| Theorie \| Theory \| Risiko \| Risk \| Produktionskapazität \| Production capacity
Description of contents:	Abstract [papers.ssrn.com]

Extent:	1 Online-Ressource
Type of publication:	Book / Working Paper
Language:	English
Notes:	In: Economic Theory, Vol. 14, Issue 2, August 1999 Volltext nicht verfügbar
Classification:	D42 - Monopoly ; D43 - Oligopoly and Other Forms of Market Imperfection ; D24 - Production; Capital and Total Factor Productivity; Capacity
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10014184260