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Strategic Excess Capacity and First-Mover Advantage under Variable Demand

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dc.contributor.authorKim, HeeSu-
dc.date.accessioned2009-01-21-
dc.date.available2009-01-21-
dc.date.issued1996-04-
dc.identifier.citationSeoul Journal of Economics, Vol.9 No.2, pp. 105-122-
dc.identifier.issn1225-0279-
dc.identifier.urihttps://hdl.handle.net/10371/1078-
dc.description.abstractThis 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.isoen-
dc.publisherInstitute of Economic Research, Seoul National University-
dc.subjecttwo-period model-
dc.subjectincumbent firm-
dc.subjectantitrust policy-
dc.titleStrategic Excess Capacity and First-Mover Advantage under Variable Demand-
dc.typeSNU Journal-
dc.contributor.AlternativeAuthor김희수-
dc.citation.journaltitleSeoul Journal of Economics-
dc.citation.endpage122-
dc.citation.number2-
dc.citation.pages105-122-
dc.citation.startpage105-
dc.citation.volume9-
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