January 2018
Intermediate to advanced
374 pages
13h 36m
English
book
Competition versus Predation in Aviation Markets
by Peter Forsyth, David W. Gillen, Otto G. Mayer, Hans-Martin Niemeier
Content preview from Competition versus Predation in Aviation Markets
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Chapter 1
Strategic Behaviour of Incumbents Rationality, Welfare and Antitrust Policy
Kai Hüschelrath
'Look ahead and reason back.'
Dixit and Nalebuff (1991)*
1. Introduction
The liberalization of formerly regulated markets often leads to 'asymmetric' market structures characterized by one or a few large incumbent firms retaining considerable market power and several smaller new entrants. These new competitors threaten the incumbents in at least two ways. On the one hand, they take market share away reducing an incumbent's share of the profit pie. On the other hand, new entrants often intensify competition reducing the size of the profit pie. Against this background, it is not surprising that incumbent firms would like to impede market entry ...
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