ISBN:
0444704345
Content:
This chapter discusses the difference between determinants of barriers to the mobility of capital and the welfare implications of entry and exit. The first task is confined for identifying situations in which a firm that is established in an industry benefits because of its incumbency. An incumbency advantage does not necessarily imply that welfare would be improved by encouraging entry. Consumers may be disadvantaged if forced to switch to another supplier. Industry costs would increase if entry eroded the benefits of economies of scale or learning. Entry prevention may result in both lower prices and lower costs than would occur if entry were allowed. The chapter describes Bain's determinants of barriers to entry and shows the way they may be interpreted in the light of recent contributions to the theory of strategic entry deterrence. The role of behavior in the determination of the conditions of entry is discussed in the chapter. Strategic entry deterrence is designed to influence the behavior of potential rivals. It is effective only to the extent that potential competitors look to current behavior as indicative of future market conditions.
In:
Handbook of industrial organization, Amsterdam : North-Holland, 1989, (1989), Seite 475-535, 0444704345
In:
9780444704344
In:
year:1989
In:
pages:475-535
Language:
English
DOI:
10.1016/S1573-448X(89)01011-3
URL:
Volltext
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