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ralph lauren polo

 
Andrew Wait and Vladimir Smirnov
 
''Industry sunk costs and entry dynamics''
( 2004, Vol. 12 No.4 )
 
 
We explore an investment game where industry sunk costs provide anincentive for a firm to be a follower into the market as opposedto a leader. For some parameter values, every firm could have adominant strategy to wait, even though immediate entry is sociallyoptimal - this is a like prisoners' dilemma. In equilibrium, afirm is more likely to have a dominant strategy to wait with anincrease in the number of potential entrants. Finally, theequilibrium can display an entry cascade.
 
 
Keywords: coordination game
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
C7 - Game Theory and Bargaining Theory:General
 
Manuscript Received : May 25 2004 Manuscript Accepted : Jun 04 2004

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