Anti-Limit Pricing

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Preprint , Report 01 Jan 2005 Japan, United Kingdom English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Jun, Byoung Heon; Park, In-Uck;

doi: 10.2139/ssrn.675303

handle: 1983/00b8ebeb-5344-4c4a-b07e-3b486d20972c , 10086/18774

Anti-Limit Pricing

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Abstract

Extending Milgrom and Roberts (1982) we present an infinite horizon entry model, where the incumbent(s) may use the current price to signal its strength to deter entry. We show that, due to the importance of entrants' types on the post-entry duopoly/oligopoly profits, the incumbent(s) may want to signal its weakness to invite entry of weaker firms.

Countries

Japan, United Kingdom

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Keywords

Limit Pricing, Dynamic Signaling, Entry Deterrence, Dynamic Signaling, Limit Pricing, Entry Deterrence, jel: jel:L11, jel: jel:D82, jel: jel:D42, jel: jel:D43

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