Market pioneering game for symmetric players

Market pioneering game for symmetric players

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Article ID: iaor19982921
Country: South Korea
Volume: 22
Issue: 4
Start Page Number: 71
End Page Number: 80
Publication Date: Dec 1997
Journal: Journal of the Korean ORMS Society
Authors: ,
Keywords: gaming
Abstract:

In this paper, we consider with a market pioneering game among symmetric firms in highly competitive situation. To describe the puzzling situation of timing competition, we construct a dynamic game model and explore the equilibrium solution. As a result, we find a subgame perfect mixed strategy Nash equilibrium conceptually defined by ‘t0 + ϵ equilibrium’. Our major findings include: i) market entry will occur in sequential manner even though the condition of each firm is symmetric ii) the optimal timing of market pioneering will be advanced until almost all of the monopolist's profit is dissipated, iii) as the market position of the pioneer is stronger, the timings of the pioneer and the follower are separated, iv) and as the slope of the profit flow is steeper, the entry timing of the two players will be pooled together.

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