Pioneer, Early Follower or Late Entrant: Entry Dynamics with Learning and Market Competition

Chia-Hui Chen, Junichiro Ishida and Arijit Mukherjee

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

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.

Date: 2021-04
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2021/DP1132.pdf

Related works:
Journal Article: Pioneer, early follower or late entrant: Entry dynamics with learning and market competition (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1132

Access Statistics for this paper

More papers in ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka Contact information at EDIRC.
Bibliographic data for series maintained by Librarian ().