Research & Publications
Entry for Buyout
1988, Journal of Industrial Economics
Eric Bennett Rasmusen
Entry into a monopolized industry may be profitable if the entrant is bought out even if it would be unprofitable to enter for continuing operation. The stronger is duopoly competition, the greater is the incentive for buyout, so an incumbent's toughness in produce-market competition may be his own undoing. Evidence from the 1890's shows examples of entry for buyout.
Rasmusen, Eric Bennett (1988), "Entry for Buyout," Journal of Industrial Economics, Vol. 36, March, 281-300.