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Entry deterrence in the ready-to-eat breakfast cereal industry
This paper presents an analysis of the ready-to-eat breakfast cereal industry based on and related to the current antitrust case involving its leading producers. A spatial competition framework is employed, with brands assumed relatively immobile. It is argued that the industry's conduct, in wh...
|a Entry deterrence in the ready-to-eat breakfast cereal industry
260
|b American Telephone and Telegraph Company
260
|a New York
260
|c Autumn 1978
300
|a pp. 305-327
490
|a The Bell Journal of Economics
|v n. 2
|x 0361915X
504
|a Incluye bibliografía
520
|a This paper presents an analysis of the ready-to-eat breakfast cereal industry based on and related to the current antitrust case involving its leading producers. A spatial competition framework is employed, with brands assumed relatively immobile. It is argued that the industry's conduct, in which price competition is avoided and rivalry focuses on new brand introductions, tends to deter entry and protect profits. Entry into a new segment of the market in the 1970s is discussed. Relevant welfare-theoretic issues are analyzed, and it is argued that the remedy proposed by the FTC is likely to improve performance.
