Leadership and Early-Mover Advantage
Leadership and Early-Mover Advantage
This chapter shows how the pure-strategy Nash equilibria in investment games can exhibit a sequencing of investment timing. The chapter is organized as follows. Section 11.1 discusses the basic deterministic game-theoretic framework of Reinganum (1981) that shows why sequential, rather than simultaneous, investment emerges as the equilibrium when duopolist firms hold a shared investment option. Sections 11.2 and 11.3 consider the option to invest in a duopoly and in an oligopoly setting, respectively. Section 11.4 deals with the option to expand production capacity. Such investment-timing games can help explain firm leadership and early-mover advantage.
Keywords: competitive advantage, investment timing game, sequential investment, duopoly, oligopoly, capacity expansion
MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.
Please, subscribe or login to access full text content.
If you think you should have access to this title, please contact your librarian.
To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.
