Entry deterrence and antibiotic conservation under post-entry Bertrand competition
Fuente:
arXiv
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| Autori principali: | , |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| _version_ | 1866909945583108096 |
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| author | Mazzoleni, Roberto Virk, Hamza |
| author_facet | Mazzoleni, Roberto Virk, Hamza |
| contents | We analyze how an incumbent antibiotic monopolist responds to the threat of post-entry Bertrand competition by a vertically differentiated rival. In a two-period model where current production drives future resistance, Bertrand competition leads to a winner-take-all outcome. We find that strategic deterrence is optimal regardless of bacterial cross-resistance to prospective rival drugs. In contrast with post-entry Cournot competition, anticipated price competition provides the incumbent with a stronger strategic incentive for conservation. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2512_05261 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Entry deterrence and antibiotic conservation under post-entry Bertrand competition Mazzoleni, Roberto Virk, Hamza General Economics Economics We analyze how an incumbent antibiotic monopolist responds to the threat of post-entry Bertrand competition by a vertically differentiated rival. In a two-period model where current production drives future resistance, Bertrand competition leads to a winner-take-all outcome. We find that strategic deterrence is optimal regardless of bacterial cross-resistance to prospective rival drugs. In contrast with post-entry Cournot competition, anticipated price competition provides the incumbent with a stronger strategic incentive for conservation. |
| title | Entry deterrence and antibiotic conservation under post-entry Bertrand competition |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2512.05261 |