Pricing and financial resources: An analysis of the disk drive industry, 1980-88

• 成果类型: Article
• 署名作者: Lerner, J
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.2307/2109808
• 发表日期: 1995-11
• 页码: 585-598
• 关键词: management buyouts; performance; predation

摘要

This paper empirically examines the ''long purse'' hypothesis (formalized by Bolton and Scharfstein (1990)) that incumbents may drive out entrants through aggressive pricing. I analyze the pricing of 733 disk drives between 1980 and 1988. Drives that are adjacent to those manufactured by thinly capitalized undiversified rivals are priced lower than other drives during the later years in the sample, when little equity financing was available to these firms. The results are robust to controls for alternative hypotheses and to other specifications of the hedonic regression.