Hit-and-run entry

Updated: Aug 20, 2021

Entry to a market in the expectation of making immediate profit, possibly followed by withdrawal. This can occur only if the entrant does not incur *sunk costs. If there are sunk costs, entry will be profitable only when the entrant expects to stay in the market long enough to recoup them. Absence of sunk costs is probable only through economies of scope: firms with skills or facilities which can be put to a variety of uses can afford hit-and-run entry to a particular market.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.