search query: @author Rasmusen, E. / total: 3
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| Author: | Rasmusen, E. |
| Title: | Entry for buyout. |
| Journal: | Journal of Industrial Economics
1988 : MAR, VOL. 36:3, p. 281-299 |
| Index terms: | ENTRY CONDITIONS ECONOMETRIC MODELS |
| Language: | eng |
| Abstract: | The possibility of buying out an entrant has an important effect on entry deterrence. Entrants can blackmail the incumbent by threatening to keep prices low, and buyout can make entry profitable which otherwise would not be. In particular, the entry deterrence policy of excess capacity to reduce the post-entry price can not only fail, but work against the incumbent. The presence of multiple oligopolistic incumbents or multiple potential entrants, however, can discourage entry for buyout. A buyout game with one potential entrant in set up first. Then a more general case is discussed where the incumbent is an oligopoly. At last the case of two potential entrants is examined. Entrant and incumbent strategies are listed. |
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