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Entry in a Stackelberg perfect equilibrium

Author

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  • Arijit Mukherjee

    (University of Nottingham, UK)

Abstract

This paper considers welfare effects of entry when the incumbent firm behaves like a Stackelberg leader in the product market. In contrast to the existing literature, we show that entry may increase welfare for any cost asymmetries between the firms. Using a general demand function we show the condition for welfare improving entry.

Suggested Citation

  • Arijit Mukherjee, 2007. "Entry in a Stackelberg perfect equilibrium," Economics Bulletin, AccessEcon, vol. 12(33), pages 1-6.
    • Handle: RePEc:ebl:ecbull:eb-07l10028
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Cournot competition Entry Stackelberg competition Welfare;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D3 - Microeconomics - - Distribution

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