January 24, 2001

Eric Rasmusen notes, erasmuse@indiana.edu 

Http://Php.Indiana.edu/~erasmuse



 Drew Fudenberg  & Jean Tirole,"The Fat-Cat Effect, The Puppy-Dog Ploy,

and the Lean and Hungry Look,'' American Economic Review, Papers and

Proceedings, 74: 361-366 (May 1984).



   

 p. 379. The original  had a  dot above Rm,  a typo. It is fixed here.



 The bottom paragraph says, "all  firms will choose to cover the

remaining market in the second period". It is crucial but unstated that

the incumbent has already locked up the first K_1 customers-- that they

cannot be reached by the second period advertising.



p. 381. Equation (7) is derived from equation (1) by taking the

derivative  of Pi^2 with respect to K_1.



p. 383.  In Table 1, the original article had a typo:  A instead of D

in the bottom row, Downward, in Cases III and II. It is fixed here.



 The Upward-sloping reaction curves indicate strategic complements, and

the Downward, strategic substitutes in the terminology of Bulow,

Geanakoplos, and Klemperer (1983), later published as



Bulow, Jeremy, John Geanakoplos  \& Paul Klemperer (1985) ``Multimarket

Oligopoly: Strategic Substitutes and Complements,'' {\it Journal of

Political Economy}, 93: 488-511 (June 1985).