This implies that the incumbent has to accommodate entry.
If the entry costs are between these two boundaries, firm 1 must choose whether to deter or to accommodate entry.
Therefore, firm 1's possibilities are (i) to accommodate entry like in the previous section, or (ii) to deter entry.
In the presence of an electron donor, a mechanism involving electron transfer from the donor to the carbonyl group, followed by release of the leaving group, can also be accommodated (entry 2, Scheme 2).
However, for arboviruses, insect borne viruses that are transmitted to mammals, the identity of a receptor, or receptors, that can accommodate entry into both insect and mammalian cells has been challenging.
Then firm 1 has to compare the payoffs resulting from (i) the case where it accommodates entry (like in the previous section) and firm 2 enters at T ˜ with that from (ii) the firm deters entry, i.e. it increases the capital stock such that it equals K critMP at time T ˜, and does not fall below this level for t > T ˜.
To summarize, we observe that firm 1 accommodates entry for low values of F, deters entry for intermediate values of F, and is a natural monopolist for high values of F. For the open-loop case firm 2 has the following entry condition: (21) V 2 O − F > 0 : enter, V 2 O − F ≤ 0 : do not enter, where V 2 O denotes firm 2's open-loop value function at t.
We need to keep entry-level salaries low in order to be able to accommodate entry-level workers, he added.
We find that three different outcomes are possible: the incumbent accommodates entry while producing just one product, blockades/deters entry, or it has to leave the market due to too heavy competition from the entrant.
Consequently, the incumbent accommodates entry.
