Second‐Mover Advantages with Asymmetric Costs and Information Updates: A Product Life Cycle Perspective |
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Authors: | Wenge Zhu Xiaohui Xu |
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Institution: | Department of Technology and Operations Management, California State Polytechnic University, , Pomona, CA, USA |
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Abstract: | Two firms with asymmetric costs engage in a Stackelberg game under multiple levels of uncertainty with information updating. A product life cycle perspective is employed to reveal when and why a second‐mover may have an advantage. At early stages in the product life cycle, when uncertainty is the dominating factor, the impact of uncertainty may be either positive or negative. As a result, the Stackelberg leader faces the possibility of either overshooting or losing its market leadership position to the second‐mover. In later market stages, when cost is more important, a process‐innovating second‐mover may accrue higher profits. Copyright © 2011 John Wiley & Sons, Ltd. |
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Keywords: | Information Update Second‐Mover Advantage Stackelberg Game Asymmetric Costs |
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