Perfection and Entry: An Example,
Abstract
This document in the context of a simplified example, shows that circumstances exist under which an incumbent firm can deter a potential entrant even where there is room for both firms in the industry, but that such deterrence may or may not form part of a perfect equilibrium. This example uses the discounted supergame structure, and the perfectness concept being used is that of subgame perfection. At the end of the discussion the author briefly describes the impact of another perfectness notion. The example is also of some historical significance as a counter-example to the conjecture that the requirement of perfectness does not reduce the set of equilibrium outcomes in the discounted game.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jul 01, 1983
- Accession Number
- ADA137658
Entities
People
- J. Cave
Organizations
- RAND Corporation