A dynamic model of predation

Saved in:

Authors and Corporations:

Rey, Patrick (Author), Spiegel, Yossi (Author), Stahl, Konrad (Author)

Other Authors:

Spiegel, Yossi 1960- [Author] • Stahl, Konrad 1941- [Author]

Type of Resource:

E-Book

Language:

English

published:

Munich, Germany CESifo June 2024

Series:

Subjects:

predation

accommodation

entry

legal rules

Markov perfect equilibrium

Graue Literatur

Source:

Verbunddaten SWB
Lizenzfreie Online-Ressourcen

Description
Summary:	We study the feasibility and proﬁtability of predation in a dynamic environment, using a parsimonious inﬁnite-horizon, complete information setting in which an incumbent repeatedly faces potential entry. When a rival enters, the incumbent chooses whether to accommodate or predate it; the entrant then decides whether to stay or exit. We show that there always exists a Markov perfect equilibrium, which can be of three types: accommodation, monopolization, and recurrent predation. We then analyze and compare the welfare eﬀects of diﬀerent antitrust policies, accounting for the possibility that recurrent predation may be welfare improving.
Physical Description:	1 Online-Ressource (circa 46 Seiten)