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Stackelberg leadership with product differentiation and endogenous entry: some comparative static and limiting results
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SYSNO ASEP 0314841 Document Type J - Journal Article R&D Document Type Journal Article Subsidiary J Ostatní články Title Stackelberg leadership with product differentiation and endogenous entry: some comparative static and limiting results Title Stackelbergerovské vůdcovství s produktovou diferenciací a endogenním vstupem: porovnávací analýza a limitní případy Author(s) Žigić, Krešimir (NHU-C) RID Source Title CERGE-EI Working Paper Series - ISSN 1211-3298
-, č. 369 (2008), s. 1-12Number of pages 12 s. Publication form www - www Language eng - English Country CZ - Czech Republic Keywords Stackelberg leadership ; product differentiation ; endogenous entry Subject RIV AH - Economics R&D Projects LC542 GA MŠMT - Ministry of Education, Youth and Sports (MEYS) CEZ MSM0021620846 - NHU-C Annotation Allowing for endogenous entry in the traditional Stackelberg setup with product differentiation, leads to reverting of the standard comparative static and limiting results. Unlike in the standard Stackelberg setup with barriers to entry, the leader's profit increases when the differentiation becomes lower. The reason is that competition becomes tougher when products become more alike, and consequently, fewer firms enter in equilibrium. On the other hand, increasing product differentiation towards its limit results in number of entrants tending to infinity and for very large market, the profit of the leader approaches zero. Thus market structure approaches monopolistic competition, rather than the standard monopoly outcome that occurs with exogenous number of followers. Workplace Economics Institute - CERGE Contact Tomáš Pavela, pavela@cerge-ei.cz, Tel.: 224 005 122 Year of Publishing 2009
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