STRATEGIC DIFFERENTIATION AND STRATEGIC EMULATION IN GAMES WITH UNCERTAINTY
When players who choose a common strategy face a common shock, while players who choose different strategies face independent or imperfectly correlated shocks, equilibrium choices exhibit differentiation (respectively emulation) when the sign of the cross-partial derivative of the firms' profit functions with respect to the realizations of the uncertain variables is negative (respectively positive). I consider a variety of applications, including technology choice, brand investments, and R&D races, many of which can be characterized as two-stage games. In such games I demonstrate that differentiation is more likely to occur when the second stage game is a game of strategic substitutes. Copyright Blackwell Publishing Ltd. 2005.
Year of publication: |
2005
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Authors: | Dana, James D. |
Published in: |
Journal of Industrial Economics. - Wiley Blackwell. - Vol. 53.2005, 3, p. 417-432
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Publisher: |
Wiley Blackwell |
Saved in:
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