Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/197715
Authors: 
Chen, Chia-Hui
Ishida, Junichiro
Mukherjee, Arijit
Year of Publication: 
2018
Series/Report no.: 
ISER Discussion Paper No. 1043
Abstract: 
This paper provides a dynamic game of market entry to illustrate entry dynamics in an uncertain market environment. Our model features both private learning about the market condition and market competition, which give rise to the first-mover and secondmover advantages in a unified framework. We characterize symmetric Markov perfect equilibria and identify a necessary and sufficient condition for the first-mover advantage to dominate, which elucidates when and under what conditions a firm becomes a pioneer, an early follower or a late entrant. We also derive equilibrium payoff bounds to show that pioneering entry is generally payoff-enhancing, even though it is driven by preemption motives, and discuss efficiency properties of entry dynamics.
Subjects: 
market entry
market competition
private learning
signaling
entry timing
JEL: 
D82
D83
L13
Document Type: 
Working Paper

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