Hiding and herding in market entry ?

• 成果类型: Article
• 署名作者: Bloch, Francis; Fabrizi, Simona; Lippert, Steffen
• 署名单位: Paris School of Economics; University of Auckland; University of Auckland; University of Auckland; University of Auckland
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2022.105568
• 发表日期: 2022
• 关键词: entry; Uncertain and irreversible costs; common values; Hiding and herding; experimentation; MARKET; COMPETITION

摘要

We model entry decisions of rival firms into a new market with uncertain common entry costs, potential product market competition, and experimentation. We show that a separating equilibrium, where firms enter only when they learn that the cost is low and are immediately followed by their rival, always exists. We also show the existence of pooling equilibria. In these equilibria, uninformed firms coordinate to enter at specific entry dates with positive probability and firms that learn that the cost is low before those dates strategically delay their entry to hide under the cover of the uninformed firms. We show that these pooling equilibria, which do not trigger immediate entry, are more likely to exist with an early than a late entry date, that they are unique given a fixed entry date, and that equilibrium payoffs are nonmonotonic in the entry date. We also study recurrent-entry pooling equilibria with multiple entry dates for uninformed firms.(c) 2022 Elsevier Inc. All rights reserved.