Arbeitspapier
Profitable cannibalization
Using a model with switching costs it is shown that firms may have an incentive to set up a new firm supplying to the same market under quite general conditions. The new firm attracts some market share of the founding firm. The start up firm is thus an act of cannibalization. Moreover, entry of the new firm may increase average prices. This is due to the fact that the new firm has more difficulties to overcome switching costs than incumbent firms. Competition may therefore be less intense.
- Language
-
Englisch
- Bibliographic citation
-
Series: W.E.P. - Würzburg Economic Papers ; No. 27
- Classification
-
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Oligopoly and Other Imperfect Markets
Monopolization; Horizontal Anticompetitive Practices
- Subject
-
oligopoly
switching costs
price-increasing entry
- Event
-
Geistige Schöpfung
- (who)
-
Schulz, Norbert
- Event
-
Veröffentlichung
- (who)
-
University of Würzburg, Department of Economics
- (where)
-
Würzburg
- (when)
-
2001
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Schulz, Norbert
- University of Würzburg, Department of Economics
Time of origin
- 2001
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