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Endogenous timing of actions under conflict between two types of second mover advantage


  • Yoon, Young-Ro


In this model, two players, who are heterogeneous in information quality, compete with each other with perfect information about the other player's information quality. The less-informed player has an incentive to delay her action in order to gain more information. The more-informed player also intends to delay her action, not through a desire to learn but rather to prevent the less-informed player from gaining information. Hence, if a waiting option is available, both players want to delay their actions and the conflict between the two types of second mover advantage yields a delay race. Although both players can benefit from a delay, the gain from a delay in order to learn is greater than that from a delay intended to prevent the other from learning. Therefore, the cost for a delay plays an important role in characterizing the equilibrium, and if the sequential timing of actions is derived in a pure equilibrium, the leader will be the more-informed player. If a given cost for a delay is sufficiently low, the only equilibrium is a mixed equilibrium. Interestingly, in that equilibrium, the existence of the first-mover advantage from being imitated is also derived.

Suggested Citation

  • Yoon, Young-Ro, 2009. "Endogenous timing of actions under conflict between two types of second mover advantage," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 728-738, November.
  • Handle: RePEc:eee:indorg:v:27:y:2009:i:6:p:728-738

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    Cited by:

    1. Tetsuya Kasahara, 2015. "Strategic Technology Adoption Under Dispersed Information and Information Learning," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 12(06), pages 1-18, December.
    2. Eric Rasmusen & Young-Ro Yoon, 2007. "First versus Second-Mover Advantage with Information Asymmetry about the Size of New Markets," Caepr Working Papers 2007-017, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington.
    3. Huberts, Nick, 2017. "Strategic investment in innovation : Capacity and timing decisions under uncertainty," Other publications TiSEM 6473e1df-9b8d-49ae-99f8-b, Tilburg University, School of Economics and Management.


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