Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/234943
Authors: 
Chen, Chia-hui
Ishida, Junichiro
Mukherjee, Arijit
Year of Publication: 
2021
Series/Report no.: 
ISER Discussion Paper No. 1132
Abstract: 
Timing of market entry is one of the most important strategic decisions a firm must make, but its decision process becomes convoluted with information and payoff spillovers. The threat of competition pushes firms to enter earlier to preempt their rivals while the possibility of learning make them cautiously wait for others to take action. This combination amounts to a new class of timing games where first-mover advantage first emerges as in preemption games but second-mover advantage later prevails as in wars of attrition. Our model identifies under what conditions a firm becomes a pioneer, early follower or late entrant and shows that the timing of entry is excessively early (late) when there emerges a late entrant (early follower). We also argue that consumer inertia is often efficiency-enhancing in this environment, highlighting an elusive link between static market competition and dynamic entry competition.
Subjects: 
market entry
market competition
private learning
signaling
preemption
consumerinertia
JEL: 
D82
D83
L13
Document Type: 
Working Paper

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