Arbeitspapier

A strategic approach to wage rates as barrier to entry

In a seminal paper O. Williamson (1968) pointed out the relevance of wage rates as a barrier to entry. The crucial point in Williamson's argument is the technological difference between incumbents and entrants - as a potential entrant is supposed to produce with a more labor intensive technology than an incumbent it seems to be plausible to conclude that an increase in wage rates would be more disadvantageous to the potential entrant than to the incumbent. It is the main purpose to put the problem in a game theoretical framework that seems to be more appropriate to elaborate the strategic aspects. Then as our main result we can demonstrate that there exist deterrence equilibria even if the firms are technologically identical.

Language
Englisch

Bibliographic citation
Series: Diskussionsbeiträge - Serie I ; No. 244

Classification
Wirtschaft

Event
Geistige Schöpfung
(who)
Berninghaus, Siegfried K.
Völker, Rainer
Event
Veröffentlichung
(who)
Universität Konstanz, Fakultät für Wirtschaftswissenschaften und Statistik
(where)
Konstanz
(when)
1989

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Berninghaus, Siegfried K.
  • Völker, Rainer
  • Universität Konstanz, Fakultät für Wirtschaftswissenschaften und Statistik

Time of origin

  • 1989

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