Market entry, capacity choice, and product differentiation in duopolistic competition under uncertainty

Shinsuke Kamoto, Masaya Okawa

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

This paper examines the impact of pre-emptive competition for a leader's position on the investment strategies for market entry, production capacities, and product differentiation. In the absence of pre-emptive competition, the leader's production capacity exceeds the follower's, and the leader earns excess returns. In contrast, in its presence, the leader's production capacity decreases below the follower's, and the follower's investment value exceeds the leader's when the follower enters the market. These results suggest the new insight that pre-emptive competition provides the opportunity for the follower to expedite investing and to enhance investment value by capitalizing on the leader's insufficient capacity.

Original languageEnglish
Pages (from-to)503-522
Number of pages20
JournalManagerial and Decision Economics
Volume35
Issue number8
DOIs
Publication statusPublished - 2014 Dec 1
Externally publishedYes

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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