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Early Mover Advantages

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  • Govert E. Bijwaard

    ()

  • Maarten C.W. Janssen
  • Emiel Maasland

    (Erasmus School of Economics, Erasmus Universiteit Rotterdam)

Abstract

This paper analyzes empirically whether and if so to what extent later entrants in the European mobile telephony industry have a disadvantage vis-à-vis incumbents and early mover entrants. To analyze this question a dynamic model of market share development and a series of static models are considered. There is clear evidence of early mover advantage, mainly caused by the influence of the penetration rate: it pays to enter when still few people have acquired a mobile telephone. Another important determining factor is the Herfindahl–Hirschman Index at the moment of entry: it is significantly easier to enter a highly concentrated industry. Finally, there are important differences between countries, possibly indicating the relative strength of the national regulators. This discussion paper has resulted in a publication in Telecommunications Policy . (2008, vol. 32, issues 3-4, 246-61.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 05-007/1.

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Date of creation: 05 Jan 2005
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Handle: RePEc:dgr:uvatin:20050007

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Web page: http://www.tinbergen.nl

Related research

Keywords: Telecommunications; Entry; First-Mover Advantage;

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References

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  1. Schmalensee, Richard., 1980. "Product differentiation advantages of pioneering brands," Working papers 1140-80., Massachusetts Institute of Technology (MIT), Sloan School of Management.
  2. Klemperer, Paul D, 1987. "Entry Deterrence in Markets with Consumer Switching Costs," Economic Journal, Royal Economic Society, vol. 97(388a), pages 99-117, Supplemen.
  3. Mueller, Dennis C., 1997. "First-mover advantages and path dependence," International Journal of Industrial Organization, Elsevier, vol. 15(6), pages 827-850, October.
  4. Gurumurthy Kalyanaram & Glen L. Urban, 1992. "Dynamic Effects of the Order of Entry on Market Share, Trial Penetration, and Repeat Purchases for Frequently Purchased Consumer Goods," Marketing Science, INFORMS, vol. 11(3), pages 235-250.
  5. Christina L. Brown & James M. Lattin, 1994. "Investigating the Relationship Between Time in Market and Pioneering Advantage," Management Science, INFORMS, vol. 40(10), pages 1361-1369, October.
  6. Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 375-94, May.
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Cited by:
  1. Steffen Hoernig, 2008. "Market Penetration and Late Entry in Mobile Telephony," Working Papers 08-38, NET Institute, revised Oct 2008.
  2. Laurent BENZONI & Bruno DEFFAINS & Anh Tuc NGUYEN & Olivier SALESSE, 2011. "Competitive Dynamics Between MNOs in the Mobile Telecommunications Single Market: Lessons from the U.S. Experience," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(82), pages 127-145, 2nd quart.

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