Séminaire d’économie de Bordeaux

Sébastien Rouillon

(BxSE)

Strategic entry deterrence in a congested orbital environment

The paper analyzes how satellite mega-constellations can be used strategically to deter market entry in a congested orbital environment. It shows that an incumbent may deploy more satellites than is efficient to increase congestion and reduce rivals’ incentives to enter. This overdeployment shortens the lifetime of all satellites, including the incumbent’s, but can still be profitable if it preserves monopoly rents. As a result, excessively large constellations can arise even when size does not improve service beyond a threshold. The study highlights a new source of inefficiency driven by sequential investment and first-mover advantages, complementing existing literature. It also suggests that policies targeting only static congestion may be insufficient, as firms’ incentives are shaped by strategic entry deterrence.

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Marc-Alexandre Senegas

Reaching the earth of orbit: how much does it cost?

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