haihongyuan.com

Strategy

Chapter 14

Strategy

Table 14.01

Simultaneous Entry Game

Figure 14.01

Whether an Incumbent Pays to Prevent EntryFirst stageSecond stage

Do not enter

(pi, pe)(pm, \$0)

(pd, pd= R–F)

(pm–b, \$0)

Figure 14.02

Noncredible Threat

Cournot output(pi, pe)

(\$300, \$300)

(–\$100, –\$100)

Figure 14.03Game Trees for the Deterred Entry and Stackelberg

Equilibria

(a) Entrant’s Fixed Cost Is \$100.

(pi, pe)(\$900, \$0)

(\$450, \$125)

(\$800, \$0)(b) Entrant’s Fixed Cost Is \$16.

(\$400, \$0)(\$900, \$0)

(\$450, \$209)

(\$416, \$0)(\$208, \$0)

Table 14.02

Entrant’s Best Response and Profit

Figure 14.04Cournot and

Figure 14.06

Figure 14.07

Investment Game Tree

(pi, pe)(\$900, \$0)(\$400, \$300)(\$500, \$0)(\$132, –\$36)

Figure 14.08

Raising-Costs Game Tree

(pi, pe)(\$10, \$0)(\$3, \$3)

(\$6, \$0)(–\$1, –\$1)

Application

Evidence on Strategic Entry Deterrence

Figure 14.09

pcp2p112Qc, Units of Coke per year

Figure 14.10Shifts in the Marginal Benefit of Advertising

Marginal benefit,

marginal cost, \$ per unit21

MC

A2A1

Minutes of advertising time purchased per day