Strategic introduction of a new product under uncertainty: A duopoly case
Authors registered in the RePEc Author Service: Diana Terrazas-Santamaría
Managerial and Decision Economics, 2021, vol. 42, issue 4, 796-807
We present a continuous‐game of two symmetric firms competing strategically to launch a new product, simultaneously or sequentially. In the timing game, where each firm decides when to launch, we consider the uncertainty of profits and that the launch is successful with a probability that can be less than one. We find that when the first‐mover advantage (FMA) is large, even with a low probability of success, one firm preempts the other deteriorating the leader's value function. The simultaneous investment dominates the sequential one when the FMA is small or when the probability is almost zero.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:42:y:2021:i:4:p:796-807
Access Statistics for this article
Managerial and Decision Economics is currently edited by Antony Dnes
More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().