Paper presented at the Agricultural and Applied Economics Association annual meeting, Boston, Massachusetts, July 31-August 2, 2016., Analysis shows that incumbent firms in four food industries tend to price higher and advertise less to deter entry when potential entrants are more competitive in terms of potential market share. Industries in which incumbents adopt lower prices and higher advertising signal that there is great potential for profit and, therefore, entrants with moderate competitiveness are also able to enter the market.
