Asymmetric Spillovers and Sequential Strategic Investments

32 Pages Posted: 5 Mar 2008

See all articles by Jan Vandekerckhove

Jan Vandekerckhove

KU Leuven - Faculty of Business and Economics (FEB)

Raymond De Bondt

Catholic University of Leuven (KUL)

Date Written: February 2007

Abstract

The focus of this paper is on the consequences of asymmetric spillovers on the strategic investments in an oligopoly with leaders and followers. Both in the investment and output game, leaders move before the followers. Spillovers may occur between leaders and between followers and from leaders to followers. The consequences are detailed for:- the comparison of leader and follower efforts;- the comparison of investments with or without cooperation of leaders, followers or leaders and followers;- other specific real world situations. It will be argued that there are critical levels of spillovers that drive the relevant tendencies. They tend to depend in a complex way on the other parameters of the oligopoly. Still some clear tendencies emerge that can help to understand asymmetric leader-follower rivalry.

Keywords: Asymmetric spillovers, Cooperation, Sequential game, Strategic investments

JEL Classification: D72, D43, L13

Suggested Citation

Vandekerckhove, Jan and De Bondt, Raymond, Asymmetric Spillovers and Sequential Strategic Investments (February 2007). Available at SSRN: https://ssrn.com/abstract=1102028 or http://dx.doi.org/10.2139/ssrn.1102028

Jan Vandekerckhove (Contact Author)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Raymond De Bondt

Catholic University of Leuven (KUL) ( email )

Oude Markt 13
Leuven, Vlaams-Brabant
Belgium

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
80
Abstract Views
782
Rank
566,648
PlumX Metrics