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 International Conference on Complex Systems (ICCS2007)

What can the Nash equilibrium tell us about market entry, first and second mover advantage in corporate strategy?

David Doyon
Southern New Hampshire University School of Business

Nicholas Nugent
Southern New Hampshire University School of Business

Phil Fellman
Southern New Hampshire University School of Business

Jonathan Post
Computer Futures, Inc.

Roxana Wright
Keene State College

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     Last modified: October 23, 2007

Many corporations, particularly those in high technology fields base their marketing strategies on being the first to enter a market, hoping to saturate the available product space, filling their particular market niche before competitors can obtain the chance to establish a viable rival position. Other firms, particularly when approaching foreign market entry for the first time, and especially where there are significant language, cultural and geographical barriers to entry adopt a “second-mover” strategy seeking to externalize much of the costs of market entry onto the first or early movers.

In this paper we examine the problem of market entry from the standpoint of game theory using bi-matrix games in both normal and extensive forms. Drawing upon the work of Partha Dasgupta and Paul Hofer, we demonstrate necessary, if not sufficient conditions for obtaining a first or second mover advantage in new market entry. While further research, particularly empirical research is bound to help illuminate sufficient conditions, we believe that we can at this stage, at least present a novel and significant set of results defining the boundary conditions for sustainable competitive advantage in first and second mover market entry strategies.

      Quantum Nash Equilibria

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