Cost externalities and corporate diversification

Article Abstract:

A two-period model based on Fudenberg and Tirole's research into strategic learning can be used to analyse the best time of entry for established firms which make strategic use of cost externalities arising from experience transfer from their basic product range to the entered market. The model allows predictions to be made about the behaviour of newly-entered companies and about the point of entry of older companies on the basis of the learning curve, and shows that if established companies can have an effect on the structure of the post-entry game, this determines the behaviour before entry of both these companies and of incumbents.

---

Quantity leadership and social inefficiency

Article Abstract:

A comparison of the standard symmetric simultaneous-moves Cournot game with a game based on simultaneous free entry and sequential output choices is a useful way of looking at issues relating to quantity leadership and social inefficiency. An increase in total surplus can be achieved through sequential decisions without leading to a rise in prices over an equilibrium of simultaneous output (Cournot) decisions, and the results of strategic asymmetry and fixed costs included a fall in the number of active companies and equality in production levels.

---

Similar abstracts:

• Abstracts: Models for multi-plant coordination. Multinational plant location as a game of timing. Models for the evaluation of routing and machine flexibility
• Abstracts: The National Minimum Wage and its effect on business. Diversification of income generation within the football industry
• Abstracts: Tribal tales: director's unique production spotlights age-old Aboriginal culture. A capital dilemma: Tokyo's vulnerability to earthquakes prompts search for new location
• Abstracts: Internal organization and managerial compensation in oligopoly. Profit, entry and changes in concentration

This website is not affiliated with document authors or copyright owners. This page is provided for informational purposes only. Unintentional errors are possible.