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Location Choice, Product Proliferation and Entry Deterrence
Ist Teil von
The Review of economic studies, 1987-01, Vol.54 (1), p.37-45
Ort / Verlag
Oxford, etc: Wiley-Blackwell
Erscheinungsjahr
1987
Link zum Volltext
Quelle
Business Source Ultimate
Beschreibungen/Notizen
Within a slightly modified version of Hotelling's model we reconsider the claim that the threat of entry induces existing firms to produce a larger number of products than they would otherwise. We show that entry deterrence, although optimal, need not be achieved through product proliferation. In some cases the incumbent monopolist resorts to an entry-deterring strategy based on location choice rather than product proliferation. We also show that in some cases the number of products chosen by the incumbent facing the threat of entry is strictly greater than the minimum number required to deter entry.