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Airline

By Olivier Armantier, Oliver Richard Y and Jel Classi…cations L

Abstract

Preliminary; please do not quote We propose a model of simultaneous entry decisions for N symmetric …rms across M markets with demand synergies and incomplete information on marginal costs of production. We develop an algorithm, based upon Monte Carlo simulations, to determine numerically the Nash Equilibrium. We also apply the inference method proposed by Florens, Protopopescu and Richard (1997) to estimate the distribution of costs. Results provide threshold cost values for entry decisions, probabilities of entry, expected quantities and prices as well as estimated costs for each of the M markets

Topics: Industry
Year: 2000
OAI identifier: oai:CiteSeerX.psu:10.1.1.196.7920
Provided by: CiteSeerX
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