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| Author: | Calzada, J. Valletti, T.M. |
| Title: | Network competition and entry deterrence |
| Journal: | Economic Journal
2008 : AUG, VOL. 118:531, p. 1223-1244 |
| Index terms: | competition entry conditions networks |
| Language: | eng |
| Abstract: | The article develops a model of logit demand that extends the traditional duopoly framework of network competition to a multi-company industry. It is first shown that incumbents establish the reciprocal access charge inefficiently below cost when they compete in prices but they behave efficiently if they compete in utilities. Second, it is studied how incumbents determine the industry-wide access charge under the threat of entry. It is shown that incumbents may accommodate all possible entrants, only a group of them, or may completely deter entry. |
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