Vertical Product Differentiation, Entry-Deterrence Strategies, and Entry Qualities

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dc.contributor.author Noh, Yong-Hwan
dc.contributor.author Moschini, GianCarlo
dc.contributor.author Moschini, Giancarlo
dc.contributor.department Center for Agricultural and Rural Development
dc.date 2018-02-16T14:53:51.000
dc.date.accessioned 2020-06-30T01:04:59Z
dc.date.available 2020-06-30T01:04:59Z
dc.date.embargo 2015-06-18
dc.date.issued 2006-04-01
dc.description.abstract <p>We analyze the potential entry of a new product into a vertically differentiated market. Here the entry-deterrence strategies of the incumbent firm rely on "limit qualities." The model assumes quality-dependent marginal production costs and considers sequential quality choices by an incumbent and an entrant. Entry-quality decisions and the entry-deterrence strategies are related to the fixed cost necessary for entry and to the degree of consumers' taste for quality. We detail the conditions under which the incumbent increases its quality level to deter entry. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well. Welfare is not necessarily improved when entry is encouraged rather than deterred.</p>
dc.identifier archive/lib.dr.iastate.edu/card_workingpapers/457/
dc.identifier.articleid 1442
dc.identifier.contextkey 7236216
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath card_workingpapers/457
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/12806
dc.source.bitstream archive/lib.dr.iastate.edu/card_workingpapers/457/05wp403.pdf|||Sat Jan 15 00:21:29 UTC 2022
dc.subject.disciplines Industrial Organization
dc.subject.keywords entry deterrence
dc.subject.keywords quality choice
dc.subject.keywords vertical product differentiation
dc.title Vertical Product Differentiation, Entry-Deterrence Strategies, and Entry Qualities
dc.type article
dc.type.genre article
dspace.entity.type Publication
relation.isAuthorOfPublication 875efd32-d51f-480d-8d4b-3d87da3f2678
relation.isOrgUnitOfPublication 1a6be5f1-4f64-4e48-bb66-03bbcc25c76d
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