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3. Consider the Fudenberg and Tirole (1986) model of entry deterrence and accommodation discussed in class. a. Derive the condition necessary for the incumbent to
3. Consider the Fudenberg and Tirole (1986) model of entry deterrence and accommodation discussed in class. a. Derive the condition necessary for the incumbent to pursue a 'top dog' strategy to deter entry. Similarly, show the necessary conditions for an incumbent to be 'lean and hungry' as part of a deterrence strategy. b. Now the incumbent decides to accommodate entry. Derive the conditions necessary for the strategies of top dog, lean and hungry, fat cat and puppy dog. Provide some intuition for your
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