Assessment of researches of retail internationalization impact on customer attitude

To date customer attitude about companies entering the market and their possible impact upon consumers has not frequently been the object of investigation within the internationalisation of retail trade. The objective of the present article is to assess the expectations of Lithuanian consumers and the extent to which their expectations where met following the entry into the national market of the world's largest furniture retail company, IKEA. The methodological basis for the present paper is an analysis of reference material on the internationalisation of retail trade examining cases of successes and failures of retail companies, exploring and understanding consumer expectations and the ways to meet such expectations, as well as peculiarities of entering different markets. The practical significance of the present survey is that it is a survey of consumer attitude prior to the company entering the market in another country, which would enable a potential retail entrant to know the expectations of consumers and thus take appropriate decisions. The second consumer survey would enable surveyors to determine to what extent the expectations of consumers have been met and what improvements the potential entrant should seek to make.

On the Strategic Choice of Union-Oligopoly Bargaining Agenda: Further Results

This paper revisits the strategic selection of the bargaining agenda in a unionized industry with potential entry and decentralized negotiations for different competition modes. The incumbent chooses Right-to-Manage (RTM) or Efficient Bargaining (EB) considering two scenarios: (1) the agenda is imposed to the (potential) entrant (committed bargaining) and (2) the entrant can flexibly choose the agenda (flexible bargaining). In the mixed duopoly, the timing of the game is as follows: at stage 1, the EB firm bargains over wage and employment with its union, while the RTM firm bargains over the wage; at stage 2, the RTM firm chooses employment. This paper shows that the strategic selection of the agenda strongly depends on the interaction between the degree of market competition, the union’s power, and the convergence or divergence between parties on the agenda’s choice. This complex interaction leads to a very rich set of equilibrium outcomes, including multiple and even (as regards the union’s preferences on the agenda) asymmetric equilibria. Compared with alternative timings in the literature, this specification leads to substantial differences with flexible bargaining: EB emerges as equilibrium in Nash strategies for a noticeably increased set of cases.

The Signaling Role of Subsidies

This paper investigates the effect of monopoly subsidies on entry deterrence. We consider a potential entrant who observes two signals: the subsidy set by the regulator and the output level produced by the incumbent firm. We show that not only a separating equilibrium can be supported, where information about the incumbent’s costs is conveyed to the entrant, but also a pooling equilibrium, where the actions of regulator and incumbent conceal the monopolist’s type, thus deterring entry. We demonstrate that the regulator strategically designs subsidies to facilitate, or hinder, entry deterrence, depending on which outcome yields the largest social welfare. Furthermore, we compare equilibrium welfare relative to two benchmarks: complete-information environments and standard entry-deterrence games where the regulator is absent.

Spatial Competition with Entry Deterrence considering Horizontal Product Differentiations

Spatial competition plays important roles in economics, which attracts extensive research. This paper addresses spatial competitions along with horizontal product differentiations and entry deterrence. By the dynamic game theory model about one firm and a potential entrant with different cost in a linear city, this paper finds that both the higher fixed setup cost and the higher transportation cost deter entrants. To efficiently deter the entrants, the establisher is inclined to locating at the middle point of the linear city.

Three-stage entry game: The strategic effects of advertising

This paper analyzes the effects of investment in advertising in the three-stage entry game model with one incumbent and one potential entrant firm. It is shown that if a game theory is applied, under particular conditions, advertising can be used as a strategic weapon in the market entry game. Depending on the level of the advertising interaction factor, conditions for over-investment in advertising for strategic purposes are given. Furthermore, three specific cases are analyzed: strictly predatory advertising, informative advertising and the case when one firm?s advertising cannot directly influence the other firm's profit. For each of them, depending on the costs of advertising and marginal costs, equilibrium is determined, and conditions under which it is possible to deter the entry are given. It is shown that if the value of the advertising interaction factor increases, power of using advertising as a weapon to deter entry into the market decreases. Thus, in the case of informative advertising, advertising cannot be used as a tool for deterring entry into the market, while in the case of predatory advertising, it can. Also, we have proved that in the case of strictly informative advertising an over-investment never occurs, while in the two other cases, there is always over-investment either to deter or to accommodate the entry.