Preemption with a second-mover advantage

B-Tier
Journal: Games and Economic Behavior
Year: 2021
Volume: 129
Issue: C
Pages: 294-309

Authors (2)

Smirnov, Vladimir (University of Sydney) Wait, Andrew (not in RePEc)

Score contribution per author:

1.005 = (α=2.01 / 2 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We examine a timing game with complete information and observable actions when there is a second-mover advantage. Allowing for heterogenous payoffs between players and for both leader and follower payoff functions to be multi-peaked and non-monotonic, we develop a new solution method to characterize the pure-strategy equilibria. Sometimes these resemble familiar second-mover advantage equilibria from the literature. However, we show, despite a follower advantage at all times for both players, that there can be a preemption equilibrium. Our generic solution method can be applied to a range of applications, such as market entry, innovation and holdout games for rival sellers of complementary assets.

Technical Details

RePEc Handle
repec:eee:gamebe:v:129:y:2021:i:c:p:294-309
Journal Field
Theory
Author Count
2
Added to Database
2026-01-29