What is it about?
Facing an informed incumbent who has cost advantages in two different states, the uninformed entrant bids cautiously due to the incumbent’s cost advantage in the low cost state. The incumbent bids aggressively, earning additional profits because of his cost advantages.
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This page is a summary of: Bidding between incumbent and entrant, Economics Letters, September 2003, Elsevier,
DOI: 10.1016/s0165-1765(03)00100-9.
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