Industry structure and pricing over the business cycle


Spiegel, Yossi ; Stahl, Konrad


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URL: https://ub-madoc.bib.uni-mannheim.de/36900
URN: urn:nbn:de:bsz:180-madoc-369006
Document Type: Working paper
Year of publication: 2014
The title of a journal, publication series: ZEW Discussion Papers
Volume: 14-039
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: D43 , L41,
Keywords (English): Price competition , business cycle , entry , entry deterrence
Abstract: We consider the interaction between an incumbent firm and a potential entrant, and examine how this interaction is affected by demand uctuations. Our model gives rise to procyclical entry, prices, and price-cost margins, although the average price in the market can be countercyclical if the entrant is a first mover, and capacity utilization can be either pro- or countercyclical if the incumbent is a first mover. Moreover, our results show that entry deterrence by the incumbent firm can either amplify or dampen the effect of demand uctuations on prices, price-cost margins, and capacity utilization.

Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Spiegel, Yossi ; Stahl, Konrad (2014) Industry structure and pricing over the business cycle. Open Access ZEW Discussion Papers Mannheim 14-039 [Working paper]
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