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Arijit Mukherjee
''Entry in a Stackelberg perfect equilibrium''
( 2007, Vol. 12 No.33 )
This paper considers welfare effects of entry when the incumbent firm behaves like a Stackelberg leader in the product market. In contrast to the existing literature, we show that entry may increase welfare for any cost asymmetries between the firms. Using a general demand function we show the condition for welfare improving entry.
Keywords: Cournot competition Entry Stackelberg competition Welfare
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
D3 - Distribution: General
Manuscript Received : Dec 07 2007 Manuscript Accepted : Dec 07 2007

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