We argue that the effectiveness of capital as an entry barrier depends critically on its durability and that this aspect of capital has been largely ignored. We examine strategic decisions with respect to capital durability in two models. In a broad range of cases an active policy with respect...

A primary concern of recent oligopoly literature has been the use of product-specific capital to impose asymmetric market solutions, including the deterrence of entry. This article explores the surprisingly neglected topic of the correspondence between the nature of product-specific capital...