Strategic firm behavior and entry deterrence: three essays

This thesis consists of three independent chapters on entry deterrence. The first two chapters consider the use of contracts as a barrier to entry, while the final chapter examines the possibility of firms expanding their product lines to deter entry in a vertical differentiation model. In Chapter 1, the role of exclusive dealing contracts in the liner shipping industry is investigated. It is shown that if the entrant is capacity-constrained, exclusive dealing contracts can be an effective entry barrier, even if the entrant has a lower cost. Chapter 2considers an industry with two stages of production. It is shown that an upstream incumbent is able to deter the entry of a more efficient producer by establishing long-term contractual relations with downstream firms, provided the downstream firms are in direct competition against each other. Chapter 3 considers the question of entry deterrence in a one-dimensional market where goods are differentiated by quality. It is shown that an incumbent firm may decide to produce several products solely for the purpose of deterring entry. Again, it is possible that a lower-cost entrant is deterred. In all three chapters, the welfare consequence is clear: social welfare is lower, since more efficient entrants are excluded from the market.

Name thesis:degree_name

Doctor of Philosophy - PhD

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Economics

Grantor dc:publisher

University of British Columbia

Year dc:date

1993

Author dc:creator

• Yong, Jong-Say

Statement dc:rights

• For non-commercial purposes only, such as research, private study and education. Additional conditions apply, see Terms of Use https://open.library.ubc.ca/terms_of_use.

Language dc:language

eng

Handle dc:identifier

http://hdl.handle.net/2429/1680

OAI identifier oai:identifier

oai:circle.library.ubc.ca:2429/1680