Entry, pricing, and product design in an initially monopolized market

• 成果类型: Article
• 署名作者: Davis, SJ; Murphy, KM; Topel, RH
• 署名单位: University of Chicago; National Bureau of Economic Research
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/380084
• 发表日期: 2004
• 页码: S188-S225
• 关键词: competition

摘要

We analyze entry, pricing, and product design in a model with differentiated products. Market equilibrium can be separating, with multiple sellers and a sorting of heterogeneous consumers across goods, or exclusionary, with one seller serving all customer types. Entry into an initially monopolized market can occur because of cost reductions or product improvements, but entry need not lower the incumbent's price, improve efficiency, or raise consumer welfare. Post-entry design incentives favor a softening of price competition and stronger market segmentation, whereas exclusionary design changes typically raise consumer welfare. Potential, as distinct from actual, entry always benefits consumers.