Journal article
Uncovering Entry Deterrence in the Presence of Learning-by-Doing
Journal of industry, competition and trade, Vol.13(3), pp.319-338
09/01/2013
Abstract
This paper investigates a signaling entry deterrence model under learning-by-doing. We show that a monopolist's practice of entry deterrence imposes smaller welfare losses (or larger welfare gains) when learning effects are present than when they are absent, making the intervention of antitrust authorities less urgent. If, however, the welfare loss associated to entry deterrence is still significant, and thus intervention is needed, our paper demonstrates that the incumbent's practice of entry deterrence is easier to detect by a regulator who does not have access to accurate information about the incumbent's profit function. Learning-by-doing hence facilitates the regulator's ability to detect entry deterrence, thus suggesting its role as an "ally" of antitrust authorities.
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Details
- Title
- Uncovering Entry Deterrence in the Presence of Learning-by-Doing
- Creators
- Ana Espinola-Arredondo - Washington State UniversityFelix Munoz-Garcia - Washington State University
- Publication Details
- Journal of industry, competition and trade, Vol.13(3), pp.319-338
- Academic Unit
- Economic Sciences, School of
- Publisher
- Springer Nature
- Number of pages
- 20
- Identifiers
- 99900971134101842
- Language
- English
- Resource Type
- Journal article