Incumbent firms' response to entry: price, advertising, and new product introduction

Article Abstract:

A research shows that the expected response of incumbent companies is one important determinants of entry in a certain industry. Advertising, price or novel products could be used by incumbents to hinder entry. However, this concept has not much support from other studies. An analysis of data from the ready-to-eat cereal industry shows that entrants are more likely to face aggressive price response from incumbents and incumbents are more likely to respond when there is greater number of entrants.

International Affairs, Intnl Business Organizations, Advertising

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Transfer-pricing mechanisms: an experimental investigation

Article Abstract:

The performance of two transfer-pricing schemes that are capable of inducing efficient truth-telling and production while maintaining decision making, namely, the Ronen/McKinny (1970) and the Ronen (1992) were evaluated in a laboratory setting. Results show that all transfer-pricing mechanisms tested including some communication structures between performance sellers and buyers failed to achieve 100% performance efficiency due to some actual agreements' non-optimal quality.

Transfer pricing

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Should multiproduct firms provide divisional or corporate incentives?

Article Abstract:

Some effects of a multiproduct company's internal organization on its market conduct were identified through a model with full information. The strategic use of organizational forms based on corporate incentives was compared with forms based on divisional incentives. It was also suggested that corporate incentives are provided by firms when substitute goods are received and that divisional incentives are provided when complement goods are received.

Bonus & Merit Payments, Incentives (Business), Bonuses

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