Second-Mover Advantages with Asymmetric Costs and Information Updates: A Product Life Cycle Perspective
Article first published online: 29 SEP 2011
Copyright © 2011 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Volume 32, Issue 8, pages 527–533, December 2011
How to Cite
Zhu, W. and Xu, X. (2011), Second-Mover Advantages with Asymmetric Costs and Information Updates: A Product Life Cycle Perspective. Manage. Decis. Econ., 32: 527–533. doi: 10.1002/mde.1552
- Issue published online: 9 NOV 2011
- Article first published online: 29 SEP 2011
- Information Update;
- Second-Mover Advantage;
- Stackelberg Game;
- Asymmetric Costs
Two firms with asymmetric costs engage in a Stackelberg game under multiple levels of uncertainty with information updating. A product life cycle perspective is employed to reveal when and why a second-mover may have an advantage. At early stages in the product life cycle, when uncertainty is the dominating factor, the impact of uncertainty may be either positive or negative. As a result, the Stackelberg leader faces the possibility of either overshooting or losing its market leadership position to the second-mover. In later market stages, when cost is more important, a process-innovating second-mover may accrue higher profits. Copyright © 2011 John Wiley & Sons, Ltd.