Learning, Preemption, and the Degree of Rivalry

We examine a model in which all firms receive common signals as to the uncertain profitability of an investment whose actual payoffs are split only among those who develop the project earliest. The benefit from preempting rivals yields an equilibrium reduction in the amount of learning and earlier development as the number or rivals increases. The set of equilibria shrinks as the number of rivals gets large, and in the limit only the competitive outcome occurs.

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Year of publication:	1985
Authors:	Spatt, Chester S. ; Sterbenz, Frederic P.
Published in:	RAND Journal of Economics. - The RAND Corporation, ISSN 0741-6261. - Vol. 16.1985, 1, p. 84-92
Publisher:	The RAND Corporation

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005133391