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Entry deterrence when the potential entrant is your competitor in a different market
Southern Economic Journal ( IF 1.8 ) Pub Date : 2020-12-12 , DOI: 10.1002/soej.12478
Miguel Ángel Ropero 1
Affiliation  

In this article, we present a two‐period model in which one firm operates in two markets: a monopoly and a duopoly. Assuming that this firm has private information on the cross‐price elasticity of demand between the products sold in both markets, it limits its quantity supplied in the monopoly market in order to make its rival in the other market believe that entry into the monopolized market is unprofitable. As a result of this strategy, the average prices observed in both markets increase. This result suggests that the detrimental effects of entry deterrence on consumers' welfare are stronger than those predicted by previous literature.

中文翻译:

当潜在进入者是您在不同市场中的竞争对手时的进入威慑力

在本文中,我们提出了一种两种时期的模型,其中一个公司在两个市场中运作:垄断和双头垄断。假设该公司拥有有关在两个市场上出售的产品之间需求的交叉价格弹性的私人信息,则它限制了在垄断市场中的供应量,以使其在其他市场中的竞争对手相信进入垄断市场是无利可图。作为该策略的结果,两个市场中观察到的平均价格均上涨。这一结果表明,进入威慑对消费者福利的有害影响要比以前的文献所预测的要强。
更新日期:2021-01-21
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