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The Role of Investment in Entry-Deterrence

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  • Dixit, Avinash

Abstract

The theory of large-scale entry into an industry is made complicated by its game-theoretic aspects. Even in the simplest case of one established firm facing one prospective entrant, there are some subtle strategic interactions. The established firm's pre-entry decisions can influence the prospective entrant's view of what will happen if he enters, and the established firm will try to exploit this possibility to its own advantage.

Suggested Citation

  • Dixit, Avinash, 1979. "The Role of Investment in Entry-Deterrence," The Warwick Economics Research Paper Series (TWERPS) 140, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:140
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/1978-1988/twerp140.pdf
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