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Pioneer, early follower or late entrant: Entry dynamics with learning and market competition

Chen, Chia Hui; Mukherjee, Arijit; Ishida, Junichiro

Authors

Chia Hui Chen

ARIJIT MUKHERJEE Arijit.Mukherjee@nottingham.ac.uk
Professor of Industrial Economics

Junichiro Ishida



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 externalities. The threat of competition pushes firms to enter earlier to preempt their rivals while the possibility of learning makes them cautiously wait for others to take action. This combination amounts to a new class of timing games where a first-mover advantage first emerges as in preemption games but a 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 provides efficiency implications by highlighting an elusive link between static market competition and dynamic entry competition.

Citation

Chen, C. H., Mukherjee, A., & Ishida, J. (2023). Pioneer, early follower or late entrant: Entry dynamics with learning and market competition. European Economic Review, 152, Article 104360. https://doi.org/10.1016/j.euroecorev.2022.104360

Journal Article Type Article
Acceptance Date Dec 16, 2022
Online Publication Date Jan 5, 2023
Publication Date Jan 5, 2023
Deposit Date Dec 19, 2022
Publicly Available Date Jan 6, 2025
Journal European Economic Review
Print ISSN 0014-2921
Electronic ISSN 1873-572X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 152
Article Number 104360
DOI https://doi.org/10.1016/j.euroecorev.2022.104360
Keywords market entry; market competition; private learning; signaling; preemption; consumer
Public URL https://nottingham-repository.worktribe.com/output/15159879
Publisher URL https://www.sciencedirect.com/science/article/pii/S0014292122002409?via%3Dihub
Additional Information This article is maintained by: Elsevier; Article Title: Pioneer, early follower or late entrant: Entry dynamics with learning and market competition; Journal Title: European Economic Review; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.euroecorev.2022.104360

Files

This file is under embargo until Jan 6, 2025 due to copyright restrictions.




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