Endogenous timing with free entry.
(2006)
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- Authors
- Abstract
- A free entry model with linear costs is considered where firms first choose their entry time and then compete in the market according to the resulting timing decisions. Multiple equilibria arise allowing for infinitely many industry output configurations encompassing one limit-output dominant firm and the Cournot equilibrium with free entry as extreme cases. Sequential entry is never observed. Both Stackelberg and Cournot-like outcomes are sustainable as equilibria however. When the number of incumbents is given, entry is always prevented, and industry output is sometimes larger than the entry preventing level.
- Affiliations
Citations
Tesoriere, A. (2006). Endogenous timing with free entry. (ECON Working Papers 2006/47). https://hdl.handle.net/2078.5/130223