Melles, M. & Nitsche, R. Theory Decis (2016) 81: 571. doi:10.1007/s11238-016-9551-2
In textbook models of reputation, a number of entry games are played sequentially. A multimarket incumbent—the chain store—deters entry of “early” small entrants with a threat of predation. In the last markets of the game, entry occurs stochastically. We show that this stochastic entry is due to a restrictive assumption and vanishes if entrants that initially decided to stay out are allowed to reconsider their decision following entry elsewhere.