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Author: | Ashiya, M. |
Title: | Sequential entry in a vertically differentiated market |
Journal: | Japanese Economic Review
2002 : SEP, VOL. 53:3, p. 315-336 |
Index terms: | Game theory Market theory Econometric models Sequential analysis |
Language: | eng |
Abstract: | The paper considers a sequential entry game of homogeneous firms in a vertically differentiated market. A firm can choose any variety of products, with a fixed cost per product. Each product can be withdrawn afterwards without exit costs. The each firm chooses the highest quality if the fixed cost is so large that subsequent entry is blocked. It chooses middle quality to deter entry of a low-quality firm if the fixed cost decreases. Hence everyone becomes worse off as the entrant becomes more dangerous. |
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