Abstract
We analyze entry of a firm with a new and differentiated product into a market with two properties: An existing incumbent has a captive consumer base, and all consumers have heterogeneous tastes. The interaction between the share of captive consumers and the degree of taste heterogeneity leads to nonmonotone effects of both parameters on entry: The captive share can have an inverse-U relation with entry profits, and higher taste heterogeneity (i.e., less product substitutability) can impede entry in the presence of captive consumers.
| Item Type: | Journal Article, refereed, original work |
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| Communities & Collections: | 03 Faculty of Economics > Department of Economics |
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| Dewey Decimal Classification: | 330 Economics |
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| Scopus Subject Areas: | Social Sciences & Humanities > General Business, Management and Accounting
Social Sciences & Humanities > Economics and Econometrics
Social Sciences & Humanities > Strategy and Management
Social Sciences & Humanities > Management of Technology and Innovation |
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| Uncontrolled Keywords: | Management of technology and innovation, strategy and management, economics and econometrics, general business, management and accounting, materials chemistry, economics and econometrics, media technology, forestry |
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| Scope: | Discipline-based scholarship (basic research) |
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| Language: | English |
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| Date: | 1 November 2022 |
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| Deposited On: | 21 Jun 2022 14:37 |
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| Last Modified: | 25 Apr 2025 01:43 |
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| Publisher: | Wiley-Blackwell Publishing, Inc. |
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| ISSN: | 1058-6407 |
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| Additional Information: | Earlier published as ECON Working Paper No. 386: https://www.zora.uzh.ch/id/eprint/203279/ |
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| OA Status: | Hybrid |
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| Publisher DOI: | https://doi.org/10.1111/jems.12490 |
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| Other Identification Number: | merlin-id:22504 |
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Oertel, Christian