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To Commit or Not to Commit in Product-Innovation Timing Games

Author

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  • Sun Chia-Hung

    (Department of Economics, Soochow University, No. 56, Kueiyang Street, Section 1, Taipei 100, Taiwan)

Abstract

This research analyzes a firm’s timing of bringing a new product to the market, based on a product-innovation timing game in which the quality of a new product increases over time. We explore the equilibrium outcomes when both firms can precommit to their timing of market entry (the so-called precommitment game), when they cannot credibly precommit to their timing of market entry (the so-called preemption game), and when only one firm can precommit to its timing of market entry (the so-called mixed precommitment game). Sequential entry is the unique equilibrium outcome in all three games. We finally discuss two extended timing games with endogenous commitment choices. The equilibrium involves a precommitment subgame in the endogenous precommitment game with observable delay, while mixed precommitment subgames appear to be the equilibria in undominated strategies in the endogenous precommitment game with action commitment.

Suggested Citation

  • Sun Chia-Hung, 2025. "To Commit or Not to Commit in Product-Innovation Timing Games," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 25(2), pages 177-208.
    • Handle: RePEc:bpj:bejeap:v:25:y:2025:i:2:p:177-208:n:1007
    DOI: 10.1515/bejeap-2024-0147
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    More about this item

    Keywords

    timing game; precommitment game; preemption game; mixed precommitment game; endogenous precommitment game;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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