search query: @author Peitz, M. / total: 9
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| Author: | Peitz, M. |
| Title: | The pro-competitive effect of higher entry costs |
| Journal: | International Journal of Industrial Organization
2002 : MAR, VOL. 20:3, p. 353-364 |
| Index terms: | Product differentiation Cost reduction Market structure Entry conditions |
| Freeterms: | Entry costs |
| Language: | eng |
| Abstract: | In an oligopolistic market with vertical product differentiation incumbent firms use sophisticated entry deterring and accommodating strategies. When entry costs are low, firms accommodate entry. For higher entry costs incumbent firms deter entry by producing close substitutes. This paper shows that higher entry costs can lead to more intense competition, meaning lower price-cost margins and lower industry profits. It also shows that total surplus increases and all consumers are strictly better off. |
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