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

dc.contributor.author Noh, Yong-Hwan
dc.contributor.author Moschini, Giancarlo
dc.contributor.department Economics
dc.contributor.department Center for Agricultural and Rural Development
dc.date 2018-02-17T22:30:59.000
dc.date.accessioned 2020-06-30T02:05:16Z
dc.date.available 2020-06-30T02:05:16Z
dc.date.issued 2006-11-01
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.description.comments <p>This is a working paper of an article from <em>Review of Industrial Organization </em>29 (2006): 227, doi: <a href="http://dx.doi.org/10.1007/s11151-006-9115-7" target="_blank">10.1007/s11151-006-9115-7</a>.</p>
dc.identifier archive/lib.dr.iastate.edu/econ_las_pubs/192/
dc.identifier.articleid 1187
dc.identifier.contextkey 9220952
dc.identifier.s3bucket isulib-bepress-aws-west
dc.identifier.submissionpath econ_las_pubs/192
dc.identifier.uri https://dr.lib.iastate.edu/handle/20.500.12876/21380
dc.source.uri http://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=1442&context=card_workingpapers
dc.subject.disciplines Agricultural and Resource Economics
dc.subject.disciplines Economic Theory
dc.subject.disciplines Other Economics
dc.subject.keywords Entry deterrence
dc.subject.keywords Quality choice
dc.subject.keywords Stackelberg duopoly
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.isOrgUnitOfPublication 4c5aa914-a84a-4951-ab5f-3f60f4b65b3d
relation.isOrgUnitOfPublication 1a6be5f1-4f64-4e48-bb66-03bbcc25c76d
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