Theory and Decision

, Volume 81, Issue 4, pp 571–579

Multiple rounds in a chain store game

Article

DOI: 10.1007/s11238-016-9551-2

Cite this article as:
Melles, M. & Nitsche, R. Theory Decis (2016) 81: 571. doi:10.1007/s11238-016-9551-2
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Abstract

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.

Keywords

Multimarket Firms Entry Predation Reputation 

JEL Classification

C72 C73 D82 L1 L41 

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Helvetia InsurancesBaselSwitzerland
  2. 2.E.CA Economics and European School of Management and TechnologyBerlinGermany

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