Decision time and steps of reasoning in a competitive market entry game
AbstractEntry decisions in market entry games usually depend on the belief about how many others are entering the market, the belief about the own rank in a real effort task, and subjects' risk preferences. In this paper I am able to replicate these basic results and examine two further dimensions: (i) the level of strategic sophistication, which has a positive impact on entry decisions, and (ii) the impact of time pressure, which has a (partly) negative influence on entry rates. Furthermore, when ranks are determined using a real effort task, differences in entry rates are explainable by higher competitiveness of males. Additionally, I show that individual characteristics are more important for the entry decision in more competitive environments.
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Bibliographic InfoPaper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2013-19.
Date of creation: Jul 2013
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Market entry game; Time pressure; Level-k reasoning; Risk; Competitiveness; Experiment;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-10 (All new papers)
- NEP-BEC-2013-08-10 (Business Economics)
- NEP-CDM-2013-08-10 (Collective Decision-Making)
- NEP-COM-2013-08-10 (Industrial Competition)
- NEP-EXP-2013-08-10 (Experimental Economics)
- NEP-GTH-2013-08-10 (Game Theory)
- NEP-NEU-2013-08-10 (Neuroeconomics)
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