Entry Deterrence and Price Competition under Asymmetric Information

다국어 초록 (Multilingual Abstract)

We study limit pricing in a price-based duopoly market under asymmetric information on the demand state. An incumbent, who is a monopolist in the initial period, has complete information on the size of a market, while a potential entrant only knows it partially. After observing the sales price of the incumbent in the first period, the entrant decides whether to enter a duopoly market and the sales price if she chooses to. We present a separating perfect Bayesian equilibrium, which indicates that limit pricing can deter the entry of a potential entrant under price competition when there is information asymmetry about the demand state.

목차 (Table of Contents)

• Abstract
• 1. Introduction
• 2. Model Framework
• 3. Separating Equilibrium
• 4. Numerical Examples
• 5. Conclusion
• References

참고문헌 (Reference)

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