Pre-emptive Competition

TL;DR: This review explores the changes in the microbiota that are relevant to human health, especially in light of the rise of chronic inflammatory disorders and tries to elucidate the underlying ecological mechanisms behind these disorders and provide potential solutions for their avoidance.

TL;DR: In this paper, the authors investigate some of the possible causes of this form of industry behavior in two ways: over-capacity and under-capacity, and identify a number of possible reasons that may combine to cause this phenomenon.

TL;DR: In this article, the authors explored the role of sunk costs in shaping industry conduct and development outcomes associated with the resource extraction sector and developed analytical models that show specifically how sunk costs influence investment behavior and outcomes.

TL;DR: In this article, two leading theoretical approaches to understand how firms operate in markets and the functioning of their internal organizations are discussed, namely game theory and agency theory, which is a microanalytic approach that offers a useful framework for organizing thinking about the factors that influence firm strategic conduct vis-a-vis its competitors.

TL;DR: The concept of perfect equilibrium point has been introduced in order to exclude the possibility that disequilibrium behavior is prescribed on unreached subgames [Selten 1965 and 1973]. Unfortunately this definition of perfectness does not remove all difficulties which may arise with respect to unreached parts of the game.

TL;DR: The authors reexamine Selten's model, adding to it a small amount of imperfect (or incomplete) information about players' payoffs, and find that this addition is sufficient to give rise to the reputation effect that one intuitively expects.

Abstract: Conditions of entry into markets where sellers are few are analyzed intensively by Professor J. S. Bain in his Barriers to New Competition.1 In the tightly written first chapter the theory of entry is developed far beyond what was previously in the literature. There emerges a series of hypotheses as to the conditions of entry, and the probable degree to which they serve as barriers to new competition. A bold attempt is then made to measure the height of these barriers in 20 manufacturing industries. Predictions stemming from these empirical findings are compared with observed performance of these industries. Finally, the conclusions with respect to the significance of types of entry barriers lead to a number of observations as to public policy. All of this comprehensive analysis is carried out explicitly within the framework of comparative statics. Specifically excluded from the circumstances considered as having a significant effect on entry, and through that on the maximum level of the equilibrium price, are secular or cyclical [or episodic?] movements of demand, capacity or costs. Nor, except for a few notable cases of product innovation, does Bain believe that new sellers are able to alter the condition of entry. Instead, "It is definitely posited for purposes of the present study-on the basis of extensive empirical observation-that the condition of entry as defined and its ultimate determinants are usually stable and slowly changing through time . . ." (p. 18). Such stability is elsewhere said to exist "persistently . . . over a period of time." Repeatedly this or a similar phrase appears to emphasize that observation ex post can be tied conceptually to the ex ante long-term equilibrium. Such stable and slowly changing conditions of entry are held to determine the ceiling price for an industry or the amount by which its price can, persistently, exceed the level ". . . hypothetically attributed to long-run equilibrium in pure competition" (p. 6). The actual persistent level of price may fall short of this entry-inviting level because of the nature of interfirm rivalry. The latter opens up the whole of oligopoly theory, but the author moves into that area only to indicate how the alternative solutions to interfirm rivalry would affect the price expectations of a would-be entrant. Entry is marked off from other sources of capacity expansion by the require-