ความคิดเห็นที่ 55
Entry Deterrence
Competition benefits everyone but the competitors. More competition means lower prices and reduced profits. Businessmen would like to come to agreements not to compete, but alas, antitrust laws make such agreements illegal.
Imagine that you run Beta Brothers, which has a highly profitable local monopoly on bbogs. In fact, you are probably making a little too much money for your own long-term good. A potential competitor is eyeing your business and figures your huge monopoly profits should be shared. You desperately want to keep the competitor out, but your antitrust lawyer wont let you bribe it to stay away and you lack the criminal contacts necessary to make physical threats. How can you protect your bbog monopoly?
Would cutting prices to suicide levels deter your rival from challenging you? You could set prices below costs so that neither you nor anyone who tried to enter the market could make money. When your potential competitor abandons its plans to enter your market, you can raise prices to their previous level. By setting suicide prices you make an implied threat that if your rival enters you will keep your low prices and your rival will lose money. Unfortunately, credibility problems make suicide prices an ineffective way of deterring entry.
Your potential competition doesnt care per se about what price you charge before it enters. If it believed you would maintain suicide prices after its entry, then it would stay away. Unfortunately, your implied threat to maintain suicide prices is devoid of credibility. If the competition enters your market, it would be fairly stupid for you to bankrupt your own business just to spite it. Once the competition starts selling bbogs, it would be in your interest to set a price that maximized your profit given that you have competition. This price is unlikely to be one where everyone in the industry (including you!) suffers permanent losses. Consequently, charging extremely low prices today does not credibly signal to the competition that you will continue to set low prices if they enter your market.
Consider the game in Figure 10. The game starts by assuming that you have set suicide prices. The competition then decides whether to enter the market. If it enters, you decide whether to keep low prices or raise them. If you keep low prices, you lose money (as does the competition). If you raise prices, then you make a small profit. If the potential competition thought that you would keep low prices, then it would not enter. Unfortunately, once it enters, you should raise prices since you are now stuck with the competition. Your rival should predict your actions and enter your bbog market. As a result, setting suicide prices before entry does not keep away the competition.
จากคุณ :
Spirit of Darkness 
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9 เม.ย. 50 10:25:26
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