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Strategic firm behavior and entry deterrence: three essays

This thesis consists of three independent chapters on entry deterrence. The first two chapters consider the use of contracts as a barrier to entry, while the final chapter examines the possibility of firms expanding their product lines to deter entry in a vertical differentiation model. In Chapter 1, the role of exclusive dealing contracts in the liner shipping industry is investigated. It is shown that if the entrant is capacity-constrained, exclusive dealing contracts can be an effective entry barrier, even if the entrant has a lower cost. Chapter 2considers an industry with two stages of production. It is shown that an upstream incumbent is able to deter the entry of a more efficient producer by establishing long-term contractual relations with downstream firms, provided the downstream firms are in direct competition against each other. Chapter 3 considers the question of entry deterrence in a one-dimensional market where goods are differentiated by quality. It is shown that an incumbent firm may decide to produce several products solely for the purpose of deterring entry. Again, it is possible that a lower-cost entrant is deterred. In all three chapters, the welfare consequence is clear: social welfare is lower, since more efficient entrants are excluded from the market.

Identiferoai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:BVAU.2429/1680
Date11 1900
CreatorsYong, Jong-Say
Source SetsLibrary and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada
LanguageEnglish
Detected LanguageEnglish
TypeElectronic Thesis or Dissertation
RelationUBC Retrospective Theses Digitization Project [http://www.library.ubc.ca/archives/retro_theses/]

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