Economics Seminar Series - Patrick Rey (TSE) | Dipartimento di Scienze Economiche

Economics Seminar Series - Patrick Rey (TSE)

20 marzo 2024 12:30
Aula 17 (Caniana)
Patrick Rey (TSE)
Seminari di dipartimento
Persona di riferimento: 
Piera Bello (
Strutture interne organizzatrici: 
Dipartimento di Scienze Economiche

Titolo: A Dynamic Model of Predation

Abstract: Growing concern about the market power of big tech giants has led to renewed interest in predatory behavior. We study the feasibility and profitability of predation in a dynamic environment, using a parsimonious infinite-horizon, complete information setting in which an incumbent repeatedly faces potential entry. When a rival enters, the incumbent chooses whether to accommodate or predate it; the entrant then decides whether to stay or exit. We show that there always exists a Markov perfect equilibrium, which can be of three types: accommodation, monopolization, and recurrent predation. We then analyze and compare the welfare effects of different antitrust policies.