Demand uncertainty, product differentiation, and entry timing under spatial competition
Noriaki Matsushima and
ISER Discussion Paper from Institute of Social and Economic Research, Osaka University
We investigate the entry timing and location decisions under market size uncertainty with Brownian motions in a continuous-time spatial duopoly competition. We show the following results. The entry threshold of the follower non-monotonically increases in volatility, implying that the leader's monopoly periods get longer with volatility. However, the leader is more likely to increase the degree of product differentiation as the volatility rises. A larger entry cost asymmetry between the firms places the leader closer to the edge in a preemption equilibrium although such an asymmetry places the leader closer to the center in a sequential equilibrium.
New Economics Papers: this item is included in nep-com and nep-geo
Date: 2017-07, Revised 2018-07
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:dpr:wpaper:1007r
Access Statistics for this paper
More papers in ISER Discussion Paper from Institute of Social and Economic Research, Osaka University Contact information at EDIRC.
Bibliographic data for series maintained by Fumiko Matsumoto ().