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Rey, Patrick
, Spiegel, Yossi and Stahl, Konrad
(2022)
A dynamic model of predation.
TSE Working Paper, n. 22-1375, Toulouse.
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Abstract
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.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | October 2022 |
| Place of Publication: | Toulouse. |
| Uncontrolled Keywords: | predation, accommodation, entry, legal rules, Markov perfect equilibrium |
| JEL Classification: | D43 - Oligopoly and Other Forms of Market Imperfection L41 - Monopolization; Horizontal Anticompetitive Practices |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse Capitole |
| Site: | UT1 |
| Date Deposited: | 29 Jun 2023 14:49 |
| Last Modified: | 04 Nov 2024 10:51 |
| OAI Identifier: | oai:tse-fr.eu:127458 |
| URI: | https://publications.ut-capitole.fr/id/eprint/47937 |
