IDEAS home Printed from https://ideas.repec.org/p/fth/teavsa/33-94.html
   My bibliography  Save this paper

Survibal of Small Firms: Guerrilla Warfare

Author

Listed:
  • Fershtman, C.

Abstract

Duopolistic interaction between a small firm and a large established firm is considered and compared to guerrilla warfare, The paper investigates a “hit and run” equilibrium in which the small firm enters the market, stays there for several periods, exits, stays out for several periods, and then reenters. Occasionally there may be a price war (or retaliation), but the small firm may also exit voluntarily, thereby avoiding possible confrontation. The amount of time that the small firm stays in the market and the timing of the price wars do not follow any predictable pattern, which is part of the mixed strategies that both firms play in equilibrium.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Fershtman, C., 1994. "Survibal of Small Firms: Guerrilla Warfare," Papers 33-94, Tel Aviv - the Sackler Institute of Economic Studies.
  • Handle: RePEc:fth:teavsa:33-94
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Green, Edward J & Porter, Robert H, 1984. "Noncooperative Collusion under Imperfect Price Information," Econometrica, Econometric Society, vol. 52(1), pages 87-100, January.
    2. Shilony, Yuval, 1977. "Mixed pricing in oligopoly," Journal of Economic Theory, Elsevier, vol. 14(2), pages 373-388, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bagwell, Kyle & Wolinsky, Asher, 2002. "Game theory and industrial organization," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 3, chapter 49, pages 1851-1895, Elsevier.
    2. Berck, Peter & Brown, Jennifer & Perloff, Jeffrey M. & Villas-Boas, Sofia Berto, 2008. "Sales: Tests of theories on causality and timing," International Journal of Industrial Organization, Elsevier, vol. 26(6), pages 1257-1273, November.
    3. Sofia Berto Villas-Boas & J. Miguel Villas-Boas, 2008. "Learning, Forgetting, and Sales," Management Science, INFORMS, vol. 54(11), pages 1951-1960, November.
    4. Villas-Boas, J Miguel, 1995. "Models of Competitive Price Promotions: Some Empirical Evidence from the Coffee and Saltine Crackers Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(1), pages 85-107, Spring.
    5. Kyle Bagwell, 1987. "Introductory Price as a Signal of Cost in a Model of Repeat Business," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(3), pages 365-384.
    6. Guillem Roig, 2021. "Collusive equilibria with switching costs: The effect of consumer concentration," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 100-121, February.
    7. Timothy J. Richards, 2006. "Sales by multi-product retailers," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(4), pages 261-277.
    8. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    9. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    10. Abito, Jose Miguel & Chen, Cuicui, 2023. "A partial identification framework for dynamic games," International Journal of Industrial Organization, Elsevier, vol. 87(C).
    11. Joseph E. Harrington, Jr., 2004. "Cartel Pricing Dynamics in the Presence of an Antitrust Authority," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 651-673, Winter.
    12. Inkoo Cho & Noah Williams, 2024. "Collusive Outcomes Without Collusion," Papers 2403.07177, arXiv.org.
    13. Juan-José Ganuza & Jos Jansen, 2013. "Too Much Information Sharing? Welfare Effects of Sharing Acquired Cost Information in Oligopoly," Journal of Industrial Economics, Wiley Blackwell, vol. 61(4), pages 845-876, December.
    14. Ronchi, Loraine, 2006. "Fairtrade and market failures in agricultural commodity markets," Policy Research Working Paper Series 4011, The World Bank.
    15. Ely, Jeffrey C. & Valimaki, Juuso, 2002. "A Robust Folk Theorem for the Prisoner's Dilemma," Journal of Economic Theory, Elsevier, vol. 102(1), pages 84-105, January.
    16. Liliane Karlinger, 2008. "How Demand Information Can Destabilize a Cartel," Vienna Economics Papers 0803, University of Vienna, Department of Economics.
    17. Iuliana Zlatcu & Marta-Christina Suciu, 2017. "The role of economics in cartel detection. A review of cartel screens," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 6(3), pages 16-26, September.
    18. Matsushima Hitoshi, 2020. "Behavioral Theory of Repeated Prisoner’s Dilemma: Generous Tit-For-Tat Strategy," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 20(1), pages 1-11, January.
    19. Yaroslav Rosokha & Chen Wei, 2024. "Cooperation in Queueing Systems," Management Science, INFORMS, vol. 70(11), pages 7597-7616, November.
    20. Michael R. Baye & John Morgan & Patrick Scholten, 2004. "Price Dispersion In The Small And In The Large: Evidence From An Internet Price Comparison Site," Journal of Industrial Economics, Wiley Blackwell, vol. 52(4), pages 463-496, December.

    More about this item

    Keywords

    business ; competition;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fth:teavsa:33-94. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: https://edirc.repec.org/data/setauil.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.