{"title":"Inference on noncooperative entry deterrence","authors":"Seiichiro Mizuta","doi":"10.1111/jems.12608","DOIUrl":null,"url":null,"abstract":"This study empirically investigates strategic entry‐deterrence behavior under oligopolistic competition. I develop a structural econometric model describing incumbents' entry‐deterrence behavior based on the framework of Gilbert and Vives. I show theoretically that incumbents' marginal costs are interval‐identified under the assumption that incumbents deter entry in equilibrium. The structural model is estimated using data from the Japanese aluminum smelting industry. A Vuong‐type model selection test utilizing an instrument demonstrates that the entry‐deterrence model is more consistent with the data than an ordinary Cournot competition model without entry threats.","PeriodicalId":47931,"journal":{"name":"Journal of Economics & Management Strategy","volume":"47 1","pages":""},"PeriodicalIF":1.2000,"publicationDate":"2024-07-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Economics & Management Strategy","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1111/jems.12608","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This study empirically investigates strategic entry‐deterrence behavior under oligopolistic competition. I develop a structural econometric model describing incumbents' entry‐deterrence behavior based on the framework of Gilbert and Vives. I show theoretically that incumbents' marginal costs are interval‐identified under the assumption that incumbents deter entry in equilibrium. The structural model is estimated using data from the Japanese aluminum smelting industry. A Vuong‐type model selection test utilizing an instrument demonstrates that the entry‐deterrence model is more consistent with the data than an ordinary Cournot competition model without entry threats.