We study an entry model where an incumbent privately informed about costs can make a cost-reducing investment choice, along with a pricing decision, in order to prevent a competing rm from entering the market. We show that if limit pricing per se can not deter pro table entry, the opportunity to undertake a strategic investment does not provide an additional instrument for the achievement of this goal to the incumbent.

Brighi, L. e M., D'Amato. "Limit Pricing and Strategic Investment" Working paper, DEMB WORKING PAPER SERIES, Dipartimento di Economia Marco Biagi - Università degli Studi di Modena e Reggio Emilia, 2022. https://doi.org/10.25431/11380_1289184

Limit Pricing and Strategic Investment

Brighi, L.
;
D'Amato, M.
2022

Abstract

We study an entry model where an incumbent privately informed about costs can make a cost-reducing investment choice, along with a pricing decision, in order to prevent a competing rm from entering the market. We show that if limit pricing per se can not deter pro table entry, the opportunity to undertake a strategic investment does not provide an additional instrument for the achievement of this goal to the incumbent.
2022
Ottobre
Brighi, L.; D'Amato, M.
Brighi, L. e M., D'Amato. "Limit Pricing and Strategic Investment" Working paper, DEMB WORKING PAPER SERIES, Dipartimento di Economia Marco Biagi - Università degli Studi di Modena e Reggio Emilia, 2022. https://doi.org/10.25431/11380_1289184
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11380/1289184
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