A strategic approach to wage rates as barrier to entry

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

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

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

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

Further information

• Handle: http://hdl.handle.net/10419/68861
• Last update: 10.03.2025, 11:42 AM CET