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Strategic Excess Capacity and First-Mover Advantage under Variable Demand
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Kim, HeeSu | - |
dc.date.accessioned | 2009-01-21 | - |
dc.date.available | 2009-01-21 | - |
dc.date.issued | 1996-04 | - |
dc.identifier.citation | Seoul Journal of Economics, Vol.9 No.2, pp. 105-122 | - |
dc.identifier.issn | 1225-0279 | - |
dc.identifier.uri | https://hdl.handle.net/10371/1078 | - |
dc.description.abstract | This paper modifies Spulber's (1981) two-period model of entry deterrence game by introducing variable demand. I show that the incumbent firm may hold pre-entry excess capacity under the post entry game rule of Cournot-Nash, if post-entry demand is greater enough than pre-entry demand. The Excess Capacity Hypothesis is thus revived. It is also shown that if the discount rate is sufficiently high under a booming prospect of the market, the incumbent may choose to give up its first-mover advantage by installing extra capacity in the post-entry phase. A numerical example with implications for antitrust policy is also presented. | - |
dc.language.iso | en | - |
dc.publisher | Institute of Economic Research, Seoul National University | - |
dc.subject | two-period model | - |
dc.subject | incumbent firm | - |
dc.subject | antitrust policy | - |
dc.title | Strategic Excess Capacity and First-Mover Advantage under Variable Demand | - |
dc.type | SNU Journal | - |
dc.contributor.AlternativeAuthor | 김희수 | - |
dc.citation.journaltitle | Seoul Journal of Economics | - |
dc.citation.endpage | 122 | - |
dc.citation.number | 2 | - |
dc.citation.pages | 105-122 | - |
dc.citation.startpage | 105 | - |
dc.citation.volume | 9 | - |
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