3c_Sequential

3c_Sequential - Sequential Games and Market Entry ManEc 387...

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Nile W. Hatch © 2002 – 2008 ManEc 387 Economics of Strategy Sequential Games and Market Entry 1
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Nile Hatch © 1996 – 2008 Sequential Games • So far, we have seen only games where each player must move (or at least commit to move) at the same time • When players move in sequence, the logic and dynamics of the game changes • Sequential games provide new insights into the dynamics of interactions – Sources and dynamics of entry — entry barriers and entry opportunities deFne entrepreneurial and routinized regimes of competition – Sources and dynamics of Frst mover advantages 2
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Nile Hatch © 1996 – 2008 A Business Situation Barkley has been battling Sharpe in the market for high- end digital recording equipment Most experts agree that the market will ultimately support only one Frm, and that the Fnal shakeout will occur this year Industry analysts are waiting for the two Frms to announce whether they will be serving the home or professional markets At this year’s tradeshow in Phoenix (6 months hence), all bets are on Sharpe, which is expected to earn $100 million with its promotion strategy 3
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Nile Hatch © 1996 – 2008 The Payoffs -10 -20 10 -10 3 100 20 -2 Sharpe Professional Household Profess. Households Barkley * Is there any way out of this mess for Barkley?
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This note was uploaded on 04/22/2011 for the course MANEC 387 taught by Professor Crawford,l during the Fall '08 term at BYU.

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3c_Sequential - Sequential Games and Market Entry ManEc 387...

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