The timing and location of entry in growing markets: subgame perfection at work

• 成果类型: Article
• 署名作者: Bollinger, Bryan; Doraszelski, Ulrich; Judd, Kenneth L.; McDevitt, Ryan C.
• 署名单位: New York University; University of Pennsylvania; Stanford University; Duke University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12462
• 发表日期: 2024
• 页码: 169-198
• 关键词: sequential entry; continuous-time; differentiation; equilibrium; COMPETITION; TECHNOLOGY; preemption; diffusion; STABILITY; CHOICE

摘要

We develop and analyze a dynamic model in which firms decide when and where to enter a growing market. We do not pre-specify the order of entry, allowing instead for the leader and follower to be determined endogenously. We characterize the subgame perfect equilibria of the dynamic game and show the times and locations of entry are governed by the threat of preemption, which leads to premature entry, less extreme locations, and the dissipation of rents. Using data on gas stations, restaurants, and hotels in isolated markets, we find results consistent with subgame perfection for gas stations and three-star hotels.