In 1934 Springer published a book by Heinrich von Stackelberg, "Market and Equilibrium", which contained pathbreaking studies on oligopolistic markets. In particular, it analyzed the behavior of a ?rm acting as a leader with a ?rst mover advantage in the choice of its production level over another ?rm acting as a follower. That analysis became the foundation of the economic theory of market leaders and is the starting point of my book. In the following pages I develop a generalization of Stackelberg's idea, with a focus on the und- standing of the behavior of market leaders under di ?erent entry conditions, particularly when entry in the market is endogenous. Rather than limiting the analysis to the e ?ects of the market structure on the behavior of the market leaders, I also study the e ?ects of the behavior of market leaders on the market structure. In other words, this book can be seen as an attempt to describe - dogenous market structures where the strategies, the expectations on the strategies of the others, and also the entry decisions are the fruit of rational behavior. In the last few decades, economic theory has put a lot of emphasis on the rational behavior in the choice of actions and strategies and on the rational expectations on these choices. Most ?elds of economic theory have embraced both these elements adopting the rational expectations approach in models with perfect competition ?rst and imperfect competition later.
From the reviews: "Etro's Competition, Innovation and Antirust is a remarkable and quite unique piece of work ... . any serious future scholarly article or textbooks that deal with competition and market structures or antitrust issues will have to cite, and that any serious and conscientious teacher of industrial organization should recommend as reading to their students. Needless to say, the book is already playing a prominent role on my upgraded syllabus for the graduate course of industrial organization for this academic year." (KreSimir Zigic, European Competition Journal, Vol. 3 (2), 2007) "The key insight that forms the backbone of this book by Federico Etro ... is that a market leader faced with endogenous entry, subsequent to the leader's output decision, can produce enough to deter entry, thus giving rise to a limit price and high overall market performance. ... The book also offers a nice historical perspective on both the relevant theoretical foundations and the extant policy debates on antitrust issues, which is likely to be useful to young scholars." (Rabah Amir, www.intertic.org, March, 2008) "In this innovative and thoughtful book, Federico Etro provides a novel approach to competition policy in innovative industries. Building on the notion of Stackelberg equilibrium with endogenous entry, which he has himself contributed to develop, he highlights the crucial role of potential competition in research in determining market performance. ... This book will be of great value to scholars and visionary practitioners, and may hopefully have a large impact on policy." (Vincenzo Denicolo, www.intertic.org, March, 2008) "This book explores the role of leadership in the economic theory of oligopoly, both for static oligopoly and for dynamic patent race games of R&D. It provides valuable service in reviewing existing models and extending them to careful consideration of the role of the first mover; in particular, to allowing for the leader to take into account the effects of its actions on entry and hence subsequent market structure. I thoroughly enjoyed its refreshing perspective." (Simon Anderson, www.intertic.org, March, 2008)