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| Author: | Chen. Z. Ross, T.W. |
| Title: | Credible retaliatory entry and strategic toe-holds |
| Journal: | Journal of Industrial Economics
2009 : JUN, VOL. 57:2, p. 343-352 |
| Index terms: | profit finance wealth markets money markets market entry |
| Language: | eng |
| Abstract: | The expected profits from entry into a new market by an established firm depend on how incumbents in the market are expected to respond. One chance, backed up by cases and the literature, is that an incumbent may respond by retaliatory entry into the first entrant's home market. This article presents a model that describes conditions under which this can be a credible threat, deterring the first entry. When the conditions determine it not credible, the article shows how firms can increase credibility through establishing toe-hold investments in other markets. |
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