Articles

Selection in Dynamic Entry Games

J. P. PONSSARD, D. GROMB, D. SEVY

Games and Economic Behavior

1997, vol. 21, pp.62-84

Departments: GREGHEC (CNRS)


This paper proposes a game theoretic framework to study dynamic competitionwith entry deterrence. Sufficient conditions are given such that the competitionprocess results in the most efficient firm being eventually selected. We show thisselection property for asymmetric firms to be the natural economic extension to therent dissipation property obtained for symmetric firms. This framework is used todiscuss previous models in which the selection property had not been studiedŽ .Ž dynamic limit pricing and capacity renewal or may fail to hold quantity competition.


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