In chapter 3 it was shown that, within oligopolistic market structures, firms may enter new markets not only when there are synergies or economies of scope, but also when there are diseconomies of scope. If the marginal gains of entering a new market can outweigh the marginal negative impact on production costs caused by diseconomies of scope, the result is multimarket competition.111 Compared to a situation in which each firm specializes in one market and refrains from entering others’ home markets, the total effect on profits is negative, not only because of lost market power but also because of inefficiencies that may result from“over-diversification”.
Weitere Kapitel dieses Buchs durch Wischen aufrufen
- Commitment and multimarket contact
- Deutscher Universitätsverlag
- Chapter 5
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