To Grab for the Market or to Bide One's Time: A Dynamic Model of Entry

Posted: 9 Sep 2003

See all articles by Dan Levin

Dan Levin

Ohio State University (OSU) - Economics

James Peck

Ohio State University (OSU) - Economics

Abstract

We consider a simultaneous-move, dynamic-entry game. The fixed cost of entry is private information. Entering earlier increases the likelihood of being the monopolist but also increases the likelihood of coordination failure and simultaneous entry. We consider general continuous distributions for the fixed cost, and we characterize the unique symmetric sequential equilibrium in pure strategies. Comparative-statics results are derived. As the time between rounds approaches zero, all of the "action" occurs during an arbitrarily small amount of time. For the Bertrand model, we extend the analysis to allow for n firms.

Suggested Citation

Levin, Dan and Peck, James D., To Grab for the Market or to Bide One's Time: A Dynamic Model of Entry. Available at SSRN: https://ssrn.com/abstract=429606

Dan Levin (Contact Author)

Ohio State University (OSU) - Economics ( email )

1945 N. High Street
Columbus, OH 43210-1172
United States

James D. Peck

Ohio State University (OSU) - Economics ( email )

1945 N. High Street
Columbus, OH 43210-1172
United States

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