Strategic Alliances, Shared Facilities, and Entry Deterrence
In this article we explore some possible anticompetitive effects of one particular type of strategic alliance---common in the airline industry, among others--that involves the sharing of production capacity. An offer to share an existing facility can allow an incumbent to persuade a potential entran...
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| Veröffentlicht in: | The Rand journal of economics 2000-07, Vol.31 (2), p.326-344 |
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| container_end_page | 344 |
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| container_title | The Rand journal of economics |
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| creator | Chen, Zhiqi Ross, Thomas W. |
| description | In this article we explore some possible anticompetitive effects of one particular type of strategic alliance---common in the airline industry, among others--that involves the sharing of production capacity. An offer to share an existing facility can allow an incumbent to persuade a potential entrant not to build its own facility. We establish conditions under which an agreement to share will be anticompetitive in the sense that, absent the agreement, a more competitive outcome (i.e., entry with new capacity) would have obtained. Such alliances can reduce welfare even if the incumbent and entrant will not be direct competitors. |
| doi_str_mv | 10.2307/2601043 |
| format | Article |
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| ispartof | The Rand journal of economics, 2000-07, Vol.31 (2), p.326-344 |
| issn | 0741-6261 1756-2171 |
| language | eng |
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| source | RePEc; Business Source Complete; Jstor Complete Legacy |
| subjects | Airlines Alliances Antitrust Competition Deterrence Economic competition Economic models Economic research Economic theory Economics Effects Fixed costs Incumbents International alliances Marginal cost curve Marginal costs Market entry Market structure Monopoly Production capacity Studies |
| title | Strategic Alliances, Shared Facilities, and Entry Deterrence |
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