MARKET STRUCTURE AND ENTRY: WHERE'S THE BEEF? - CEPR
MARKET STRUCTURE AND ENTRY: WHERE'S THE BEEF? - CEPR
MARKET STRUCTURE AND ENTRY: WHERE'S THE BEEF? - CEPR
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prevention strategy. Instead, they indicate strongly that there are positive spillovers to<br />
both firms from the presence of the rival in a given market. These spillovers are best<br />
explained as the product of learning: firms are uncertain about the true size of a given<br />
market, and use the observation of rival presence to update their beliefs. In turn, this,<br />
coupled with profit spillovers arising from own presence, goes a long way towards<br />
explaining the otherwise puzzling phenomenon of a continuing program of outlet<br />
expansion that such chain stores engage in.<br />
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