Vertical Product Differentiation, Entry-Deterrence Strategies, and Entry Qualities, September 2005

We analyze the entry of a new product into a vertically differentiated market in which an entrant and an incumbent compete in prices. Here the entry-deterrence strategies of the incumbent firm rely on “limit qualities.” With a sequential choice of quality, a quality-dependent marginal production cost, and a fixed entry cost, we relate the entry-quality decision and the entry-deterrence strategies to the level of entry cost and the degree of consumer heterogeneity. Quality-dependent marginal production costs in the model entail the possibility of inferior-quality entry as well as an incumbent’s aggressive entry-deterrence strategies of increasing its quality level toward potential entry. Welfare evaluation confirms that social welfare is not necessarily improved when entry is encouraged rather than deterred.

River Barge Terminal Directory, July 2005

The Barge Terminal Directory has been prepared by the Iowa Department of Transportation’s Modal Division to provide quick access to information on Iowa’s river terminals and fleeting/harbor services. The information is to assist those who may need barge transportation services. The information in the directory was provided by the terminal operators. The Modal Division would appreciate any help on corrections, additions or deletions.