Journal ArticleDOI
Signalling and entry deterrence: a multidimensional analysis
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TLDR
In this paper, the authors consider whether a privately informed incumbent can use limit pricing and upward distortions in advertising to deter profitable entry and show that profitable entry is not deterred when the incumbent is privately informed only about its cost type and its patience level.Abstract:
I consider whether a privately informed incumbent can use limit pricing and upward distortions in advertising to deter profitable entry. Profitable entry is not deterred when the incumbent is privately informed only about its cost type. Profitable entry may be deterred, however, if the incumbent is privately informed about its cost type and its patience level. An equilibrium foundation is thus provided for the traditional hypothesis that limit pricing and aggressive advertising by an incumbent may deter profitable entry. At a methodological level, the article contributes by characterizing the refined equilibria of a signalling model with multiple dimensions of private information and multiple signals.read more
Citations
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Journal ArticleDOI
Signals and international alliance formation: The roles of affiliations and international activities
TL;DR: This paper investigated whether firms' affiliations with prominent financial intermediaries enable the formation of international collaborative agreements and found that the signaling benefits of these affiliations diminish with the firm's engagement in international activities, which can function as alternative signals by which firms convey the quality of their resources and prospects.
Journal ArticleDOI
Competing with Copycats When Customers Are Strategic
Hubert Pun,Gregory D. DeYong +1 more
TL;DR: It is found that, interestingly, lower quality levels of the manufacturer's product may increase the manufacturer’s prices and profit and the manufacturer may be worse off when customers are more likely to purchase its product immediately rather than wait for a price reduction or for the copycat's product.
Posted Content
Dissipative advertising signals quality even without repeat purchases
TL;DR: In this paper, the authors characterize the optimal separating marketing mix (price and advertising) when quality and marginal cost are both subject to chance, and show that advertising appears to be necessary together with price to signal quality.
Journal ArticleDOI
Using online channel to defer the launch of discount retailing store
TL;DR: In this article, the authors examine how a manufacturer can use the strategy of opening an online channel to manipulate the retailer's decision on opening a discount store to sell a supplier's off-price product competing with the manufacturer's product.
Posted Content
Entry Deterrence, Product Quality: Price and Advertising as Signals
TL;DR: In this paper, the authors analyze the marketing strategy of an incumbent monopolist facing a threat of entry and characterize the unique (stable) separating equilibrium and show that dissipative advertising may be used, while it is never used if either quality or cost is known.
References
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Journal ArticleDOI
Signaling Games and Stable Equilibria
In-Koo Cho,David M. Kreps +1 more
TL;DR: In this paper, the authors present a number of formal restrictions of this sort, investigate their behavior in specific examples, and relate these restrictions to Kohlberg and Mertens' notion of stability.
Journal ArticleDOI
Advertising as Information
TL;DR: In this paper, the major features of the behavior of advertising can be explained by advertising's information function, and it is shown that the most important information conveyed by advertising is simply that the brand advertises.
Journal ArticleDOI
Industry Structure, Market Rivalry, and Public Policy
TL;DR: In this article, the authors take a critical view of contemporary doctrine in this area and present data which suggest that this doctrine offers a dangerous base upon which to build a public policy toward business.
Journal ArticleDOI
Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior
TL;DR: The authors developed a model of inefficient managerial behavior in the face of a rational stock market in which managers forsake good investments so as to boost current earnings, and the market correctly conjectures that there will be earnings inflation, and adjusts for this in making inferences.
Book
The Economics of Imperfect Competition
TL;DR: The Economics of Imperfect Competition (Robinson, 1933a) as discussed by the authors was written by Joan Robinson, who also began her long intellectual friendship with Richard Kahn, after only one year of studying economics.
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