Preemption, Divestiture, and Forward Contracting in a Market Dominated by a Single Firm
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A central concern of industrial organization literature is to determine if markets dominated by a leading producer tend to remain that way when entry by rival firms is possible. In particular, suppose market entry is limited by the availability of an essential raw input, such as a natural resource, or by technological know -how. At some future time, more of the raw input becomes available, permitting outsiders to enter. At this point, the leader can maintain its market position by either discovering or purchasing new raw inputs or technologies before the potential entrants............