Second-mover advantages in dynamic quality competition
- authored by
- Heidrun C. Hoppe, Ulrich Lehmann-Grube
- Abstract
This paper explores a dynamic model of product innovation, extending the work of Dutta, Lach, and Rustichini (1995). It is shown that if R&D costs for quality improvements are low, the dynamic competition is structured as a race for being the pioneer firm with payoff equalization in equilibrium, but switches to a waiting game with a second-mover advantage in equilibrium if R&D costs are high. Moreover, the second-mover advantage increases monotonically as R&D becomes more costly.
- External Organisation(s)
-
Universität Hamburg
- Type
- Article
- Journal
- Journal of Economics and Management Strategy
- Volume
- 10
- Pages
- 419-433
- No. of pages
- 15
- ISSN
- 1058-6407
- Publication date
- 2001
- Publication status
- Published
- Peer reviewed
- Yes
- ASJC Scopus subject areas
- Business, Management and Accounting(all), Economics and Econometrics, Strategy and Management, Management of Technology and Innovation
- Sustainable Development Goals
- SDG 9 - Industry, Innovation, and Infrastructure
- Electronic version(s)
-
https://doi.org/10.1111/j.1430-9134.2001.00419.x (Access:
Closed)
