To Commit or Not to Commit in Product-Innovation Timing Games
Year: 2025
Type: article
Abstract: This research analyzes a firm’s timing of bringing a new product to the market, based on a product-innovation timing game in which the quality of a new product increases over time. We explore the equilibrium outcomes when both firms can precommit to their timing of market entry (the so-called precommitment game), when they cannot credibly precommit to their timing of market entry (the so-called preemption game), and when only one firm can precommit to its timing of market entry (the so-called mixed precommitment game). Sequential entry is the unique equilibrium outcome in all three games. We finally discuss two extended timing games with endogenous commitment choices. The equilibrium involves a precommitment subgame in the endogenous precommitment game with observable delay, while mixed precommitment subgames appear to be the equilibria in undominated strategies in the endogenous precommitment game with action commitment.
Author: Chia-Hung Sun
Institution: Soochow University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
Award: G5851309958
OpenAlex ID: W4407178372