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Rey, Patrick
, Spiegel, Yossi and Stahl, Konrad
(2024)
A Dynamic Model of Predation.
Rand journal of economics.
(In Press)
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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: | Article |
|---|---|
| Language: | English |
| Date: | 2024 |
| Refereed: | Yes |
| Place of Publication: | Mount Morris |
| 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) |
| Site: | UT1 |
| Date Deposited: | 13 Sep 2024 13:46 |
| Last Modified: | 22 Nov 2024 16:00 |
| OAI Identifier: | oai:tse-fr.eu:129429 |
| URI: | https://publications.ut-capitole.fr/id/eprint/49484 |
