Accession Number:

ADA137658

Title:

Perfection and Entry: An Example,

Descriptive Note:

Corporate Author:

RAND CORP SANTA MONICA CA

Personal Author(s):

Report Date:

1983-07-01

Pagination or Media Count:

13.0

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.

Subject Categories:

  • Economics and Cost Analysis
  • Numerical Mathematics

Distribution Statement:

APPROVED FOR PUBLIC RELEASE